Bulls double money in $FCX

Option traders are mining profits from upside positions in Freeport-McMoRan (FCX) today for the second session in a row.

On Nov. 7, our Unusual Activity Service detected the purchase of 12,500 December $12 calls for $0.37 above open interest of 3,373 contracts as part of a bullish roll with shares at $11.40. Market Rebellion co-founder Jon Najarian cited the unusual activity at that time on CNBC’s “Halftime Report.”

Those calls have traded for as much as $0.85 so far today, nearly 2.5 times their purchase price. The stock rose 11.84% in the same time frame, underscoring how quickly options can far outperform their underlying shares.

It is the second winning trade in the name posted on Market Rebellion in as many days.

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 is up 3.66% to $12.73 in midday trading. The mining and energy company has rallied recently with optimism over developments in U.S.-China trade negotiations.

(Disclosure: I am long FCX.)