$FCX calls post quick gains

Bullish option traders have more than doubled their money in Freeport-McMoRan.

On March 29, Investitute’s proprietary programs flagged the purchase of 10,000 18April $13.50 calls for $0.17 to $0.21 with shares at $12.86. This was clearly a new position, as open interest in the strike was only 2,245 contracts before the trade occurred.

Those calls were sold for $0.43 this afternoon, more than twice their purchase prices. The stock rose 6.84% in the same time frame, illustrating the kind of leverage that can be achieved with options.

Long calls lock in the price where a stock can be purchased, gaining with a rally and providing leverage to the underlying shares. The contracts can quickly lose value if the stock stalls or pulls back but also carry less risk than owning the shares themselves.

FCX was up 3.08% to $13.74 today. The mining and energy company has rallied in recent weeks with reports of progress in U.S.-China trade negotiations.