Bulls double their money in $FCX

Option traders have turned quick profits on upside call positions in Freeport-McMoRan.

On Jan. 15, Investitute’s tracking systems detected the purchase of 10,000 Weekly $12.50 calls expiring on January 25 for $0.20 to $0.23 as part of a bullish roll with shares at $11.91. Open interest in the strike was only 2,187 contracts before the trade occurred, showing that this was a new position. Investitute co-founder Pete Najarian cited the unusual activity at that time on CNBC’s “Halftime Report.”

Those calls traded up to $0.47 this morning, about double times their purchase price. The stock rose 5.96% in the same time frame, underscoring how quickly options can far outpace gains in their underlying shares.

Long calls lock in the price where investors can buy a stock, letting them position for a rally at limited cost with the potential for significant leverage. They carry less risk than owning shares because the most that can be lost is the price of the options no matter how far the stock might fall.

FCX was up 3.54% to close at $12.56 today. The copper producer’s shares have rallied this week after positive announcements were made on the global trade front.