Freeport-McMoRan Inc (FCX) Bears Cash In on Post-Earnings Slide

Options bears appear to be cashing in their bets, with Freeport-McMoRan Inc (NYSE:FCX) trading lower after earnings

Apr 26, 2016 at 11:18 AM
facebook X logo linkedin


Freeport-McMoRan Inc (NYSE:FCX) is off 2.6% today at $11.05, even though the firm's first-quarter results topped estimates. What's more, the mining company announced plans to cut 25% of its workforce. In the meantime, FCX options traders are likely cheering, considering the bearish sentiment seen ahead of earnings. 

Specifically, options traders targeting contracts that expire within three months have only been more put-skewed 20% of the time in the past year, according to FCX's Schaeffer's put/call open interest ratio (SOIR) of 1.14. Along those lines, there was the huge trade last week at the mining stock's June 11 put, where one trader dropped a cool $4.9 million on what's now a winning bet. 

Puts are again active today, trading at 1.7 times the average intraday clip. It seems most of the activity may be related to traders closing positions, as bearish bettors look to lock in paper profits amid FCX's post-earnings fall.

Elsewhere, some short sellers may be wishing they'd stuck around longer, as short interest fell roughly 21% over the past two reporting periods. Nevertheless, almost 13% of FCX's float is still sold short. At the stock's average daily trading volumes, it'd take these bears over three days to cover.

As for analysts, most have taken a wait-and-see approach toward FCX. Twelve of the 15 brokerage firms that currently track the mining stock deem it just a "hold." 

On the charts, Freeport-McMoRan Inc (NYSE:FCX) has been performing well in recent months, more than doubling the returns of the S&P 500 Index (SPX) during the past 60 sessions, on a percentage basis. Longer term, though, it's a different story, with FCX losing nearly half its value in the past 12 months. 

Sign up now for Schaeffer's Market Recap to get all the day's big stock movers, must-know technical levels, and top economic stories straight to your inbox.

 

Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on C3.ai calls
238.5% GAIN on Oracle calls

 
 
 


 
 

Rainmaker Ads CGI