2 Levels for Freeport-McMoRan Inc (FCX) Option Bears

Commodity stocks are taking it on the chin today, as the dollar rises amid increased speculation over a near-term interest-rate hike. For mining stock Freeport-McMoRan Inc (NYSE:FCX), this has resulted in a 9.4% plunge to $9.96 -- and a subsequent surge in put volume.

Specifically, puts are crossing the tape at 1.6 times the expected intraday rate -- and are outpacing calls by a nearly 2-to-1 margin. Most active is FCX's April 11 put, where the International Securities Exchange (ISE) has confirmed a mix of sell-to-close and buy-to-open activity. For those purchasing new positions, the goal is for FCX to extend today's decline south of $11 by the close on Friday, April 15 -- when front-month options expire.

Today's skepticism is nothing new for FCX. At the ISE, Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), for instance, the stock's 50-day put/call volume ratio of 0.82 ranks in the 88th percentile of its annual range. In other words, puts have been bought to open over calls at a faster-than-usual clip in recent months.

In the past 10 sessions, specifically, the equity's April 10 put has seen the biggest rise in open interest, with 32,506 contracts added. According to the ISE, a healthy portion of the activity at this now in-the-money strike -- which is home to peak put open interest in the front-month series -- was of the buy-to-open kind.

On the charts, Freeport-McMoRan Inc (NYSE:FCX) had been staging a convincing rebound off its Jan. 20 15-year low of $3.52 heading into today's trading -- more than tripling in value. However, today's sell-off has the shares south of their 10- and 200-day moving averages. The former trendline has helped buoy the shares since late January, while the latter has served as a short-term foothold in recent sessions, after spending much of the past 18 months ushering the shares lower.

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