Freeport-McMoRan Copper & Gold Stock in Free Fall

Freeport-McMoRan Copper & Gold's stock has suffered a significant decline since January 11th, losing 26% of its value in the past three weeks. The stock's intraday reversal in Friday's trading saw a sharp decline, with shares opening higher only to shed 3.1% by the closing bell. Despite the price action, implied volatilities decreased, and the February at-the-money straddle closed at $6.51, predicting a 10% move in the stock's price between now and February options expiration on the 19th.

Key Takeaways:

• The stock has lost over a quarter of its value since peaking on January 11th, shedding 26% in the past three weeks.
• Implied volatilities decreased, with the February at-the-money straddle closing at $6.51, predicting a 10% move in the stock's price between now and February options expiration on the 19th.
• The March 75/85 call spread traded blocks of 9,000 contracts, with the 75-strike call trading at the ask price of $3.20 and the 85-strike call trading at the bid price of $0.83.
• The bull call spread implies a potential maximum profit of $7.63, with a return on risk of 322%.
• The stock needs to rally 27% to hit the 85 level for maximum profit to be achieved, and needs to move 16% by March options expiration on March 19th to reach breakeven.

Statistics:

• Market capitalization: Not mentioned
• Stock price (January 11th): $90.55
• Stock price (current): $66.69
• Implied volatilities: Decreased to $6.51 (February options expiration)
• Potential profit: $7.63 (March 85 call spread)
• Return on risk: 322% (March 85 call spread)
• Rally needed for maximum profit: 27%
• Move needed for breakeven: 16% (March 19th options expiration)

Sources:

• Euclid Infotech Pvt. Ltd.
• Syndigate.info an Albawaba.com company