One very large call buy stood out like a sore thumb on Friday December 16, and it was in mining company Freeport-McMoRan Inc (FCX). That was reinforced by a large put buy in the Market Vectors Gold Miners ETF (GDX).
This call buyer was ultra aggressive buying up a whack of calls in Freeport-McMoRan Inc (FCX) Friday. One trader seems to expect great things for FCX share price in the coming two months. The trader placed a small wager of $1.68 Million in the FCX FEB17 $11.00 calls which accounted for much higher volume than normal (understatement of the year?).
During Friday trading Freeport-McMoRan Inc (FCX) shares closed trading at $13.83, down considerably on the day. Things don’t look much better today in pre market trading as it’s down 26 cents to $13.57 on some decent volume. But clearly this one trader knows something the average investor (and many pros?) don’t.
Still no news out on FCX today but you rest assured there will be something before these February calls expire. Freeport-McMoRan Inc announces Q4 earnings on January 24th which means this FCX options action could be earnings related. We’ll have to wait and see.
And as we said at the top, there was also large action in GDX puts in Market Vectors Gold Miners ETF. One trader was on the opposite side of the FCX trader, buying $158,000 in GDX Weekly 12/23 $18 puts on Friday. This trader isn’t quite as optimistic on gold miners.
Friday, Market Vectors Gold Miners ETF closed the day at $19.02, and was down considerably already last week after trading as high as $21.30’s. This makes it ever more interesting that one trader decided to drop $158,000 on a put bet that the miners ETF would go down even more this week. So far through the first 10 minutes, Market Vectors Gold Miners ETF(GDX) is up a whopping 5 cents at $19.08 after opening up as high as $19.17.
We’ll be sure to update any developments on these very unusual call buys in Market Vectors Gold Miners ETF (GDX) and in Freeport-McMoRan Inc (FCX), if, or more likely, when, they happen.