Traders mine large profits in $FCX

Upside option buyers doubled their money in Freeport-McMoRan just before their positions expired today.

On Sept. 14, Investitute’s proprietary programs cited the purchase of 9,500 Weekly $14 calls that expired this afternoon for $0.44 to $0.48 with shares at $13.75. These were clearly new positions, as open interest in the strike was only 96 contracts before the activity appeared.

Those calls traded for $0.85 today, just shy of double their original purchase price. The stock rose 8 percent in the same time period, underscoring the type of leverage that can be obtained 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 1.65 percent today to close at $14.75. The mining and energy company advanced today amid rising industrial demand from China.