Freeport-McMoRan Inc. (FCX) Traders Target Six-Year Lows

Freeport-McMoRan Inc (FCX) hasn't traded south of $15 since March 2009

Feb 11, 2015 at 10:39 AM
facebook X logo linkedin


Freeport-McMoRan Inc (NYSE:FCX) is following in the bearish path of the broader equities market today, off 2.9% at $18.18. In the options pits, puts are trading at two times what's typically seen at this point in the day, and are outpacing calls by a 3-to-1 margin. Drilling down, a number of speculators are targeting a move down to levels not seen since March 2009 over the next several months.

Specifically, FCX's May 15 put has received notable attention, and it appears a number of these contracts are being bought to open. By initiating the long puts, speculators expect the equity to breach $15 by the close on Friday, May 15, when the series expires. As noted, this would mark a roughly six-year low for the shares, and, as such, delta on the put is docked at negative 0.22. In other words, there is a roughly 1-in-5 chance the option will expire in the money.

Today's accelerated put activity is just more of the same for a stock that's surrendered more than 44% over the past 52 weeks. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), FCX's 50-day put/call volume ratio of 0.73 ranks in the 91st annual percentile, meaning puts have been bought to open over calls at a near-annual-high clip in recent months.

However, FCX's bearish bandwagon is far from full. Of the 15 analysts covering the shares, nine maintain a "buy" or better rating, with not a single "sell" to be found. Additionally, the average 12-month price target of $26.61 stands at a 46% premium to current trading levels. Should Freeport-McMoRan Inc (NYSE:FCX) continue its downward trajectory, a fresh round of bearish brokerage notes could translate into additional headwinds for the shares.

 

Unlock Weekend Profits with Chris Prybal's Favorite Strategy Up +487.5% in 2024

With the markets going left, right, and sideways, you need to have a plan now more than ever. 

Expert Trader Chris Prybal is no stranger to volatility, and has mastered finding big stock rallies while other traders aren't looking over the weekend. Rallies that produced gains like +207% on RTX calls, +236% on MARA calls, and +238% on NET calls.

A few simple moves on Sunday at 7pm could be the “Secret Sauce” your portfolio needs to not just stay afloat, but make unprecedented gains in this turbulent market.


Don’t sit on the sidelines, beat the market with Chris Prybal's strategy. Join him now!