This article talks about a big company called Freeport-McMoRan that digs up important things from the ground like copper and gold. Some rich people who have a lot of money are watching this company closely and they think it will do well in the future, so they want to buy some special contracts called options that give them the right to buy or sell the company's shares at a certain price. This makes other people interested in what is happening with the company because these rich people might know something others don't. Read from source...
1. The article title is misleading and sensationalized, implying that there is some insider or hidden information behind the scenes of Freeport-McMoRan's options trends. However, the article only provides vague descriptions of "significant move" and "something big", without any concrete evidence or analysis to support these claims.
2. The article relies heavily on anonymous sources and unverified public options records from Benzinga, which may not be accurate or representative of the actual market trends. The identity of these investors remains unknown, raising questions about their credibility and motives.
3. The article uses a 64% vs 35% ratio to describe the general mood among heavyweight investors as bullish and bearish, without providing any context or data to back up this claim. This is an oversimplification that does not reflect the complexity and diversity of investor opinions and strategies.
4. The article ends abruptly with a partial sentence, leaving readers hanging and unsatisfied. It also fails to provide any conclusion or implication of the options activities for Freeport-McMoRan's stock price or performance. This is poor writing and journalism that does not meet the standards of informing and engaging the audience.
1. Buy FCX stock at the current market price of $20 per share. The upside potential is significant as the bullish sentiment among deep-pocketed investors indicates a possible breakout in the near future. The downside risk is limited by the strong support level at $18 per share, which has held firm for the past month. This stock is suitable for both long-term and short-term investors who are looking for exposure to the mining industry and copper production.
2. Sell the September $20 put option for a credit of $1 per contract. This will generate an immediate income of 5% based on the current stock price, and it will also limit your downside risk to $18 per share in case the options are assigned to you. The put option has a delta of 0.42, which means that there is only a 42% chance of being exercised at expiration. This trade will benefit from any increase in the stock price above the strike price, as well as from the time decay of the options.
3. Buy the September $25 call option for a premium of $1 per contract. This will give you the right to purchase FCX shares at a strike price of $25 per share until the expiration date of September 17th. The call option has a delta of 0.48, which means that there is a high probability of being in-the-money if the stock reaches or exceeds the strike price. This trade will benefit from any increase in the stock price above the current level and up to $25 per share, as well as from the time decay of the options.
4. Set a stop-loss order at $18 per share for both the stock and the option positions. This will protect you from any unexpected decline in the stock price that could be triggered by negative news or events affecting the mining industry or copper production. You should also monitor the options greeks to assess the volatility and the delta of the trades, as they can impact your profitability and risk exposure.