OptionsHouse

Options Trading News

January 9, 2013  Wed 4:47 AM CT

FCX: SEE CHART GET CHAIN FIND STRATEGIES
A large trade is betting that Freeport-McMoRan will continue its rebound of the last month.  

optionMONSTER's Heat Seeker system detected the purchase of 4,500 May 33 calls in a single print for $3.40 yesterday. The volume was above the strike's open interest of 3,384 at the start of the day, so it is a new position.

FCX fell 1.1 percent yesterday to close at $34.97. The mining company plummeted from above $38 to the $30 level in early December after announcing that it was acquiring McMoRan Exploration and Plains Exploration for about $20 billion. Shares have been recovering since then as China's economy continues to show signs of improvement and raises prospects for copper demand.

The calls bought yesterday will closely track the stock's movement because they are already in the money. These options, which lock in the price where traders can buy shares, are looking for FCX to gain more than 4 percent by mid-May but will lose value if the no rally occurs. (See our Education section)

Total FCX calls outnumbered puts by nearly 2 to 1 yesterday.
Share this article with your friends


Related Stories

FCX

Is Freeport-McMoRan due for a pullback?

April 29, 2016

The mining and energy company is up 172 percent in the last three months, but June put buyers are positioning for a possible drop.

OptionsHouse

Premium Services

Education & Strategy

The Problem with Trading Earnings

AP Options specializes in Swing Trading. Swing trading is the art of locating short term, quick, aggressive movements in a stock normally created by the technicals but, can be sometimes created by the fundamentals. These trades, at least in this service, last a couple of days to a week in the majority of cases.

View more education articles »