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.
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