Freeport-McMoRan Copper & Gold Inc.
) has been in hustle mode lately. During the past three months, the
shares have tacked on 11.9% -- and cut their year-to-date deficit
to a modest 2.8% -- to trade at $33.14. Not surprisingly, option
for the most part
, turned their attention to the stock's long calls in recent
months. At the International Securities Exchange (ISE), Chicago
Board Options Exchange (
), and NASDAQ OMX PHLX (PHLX), speculators have bought to open
267,024 calls throughout the previous 10 weeks, compared to 109,744
puts. The resultant 50-day call/put volume ratio of 2.43 ranks in
the 69th percentile of its annual range, meaning long calls have
been initiated over puts at an accelerated clip of late.
This trend toward calls is mirrored in the equity's Schaeffer's
put/call open interest ratio (SOIR) of 0.59. Not only does this
show that call open interest outweighs put open interest among
options slated to expire in the next three months, but it ranks
lower than 83% of similar readings taken in the past year. Simply
stated, short-term speculators are more call-heavy than usual.
Even more telling is the equity's front-month, gamma-weighted SOIR
of 0.26, which implies that near-the-money call open interest
almost quadruples put open interest among options expiring next
Friday. Specifically, 15,486 contracts currently reside at FCX's
September 33 call, while only 2,224 contracts make up open interest
at the September 33 put.
The sentiment is sanguine outside of the options pits as well.
Although short interest increased 12.8% over the last two reporting
periods, it still accounts for a low 3.1% of the stock's available
float. What's more, FCX has been rising in the midst of this
selling pressure, which may point to underlying strength in the
Elsewhere, Freeport-McMoRan Copper & Gold Inc. boasts 12 "buy"
or better ratings, compared to four "holds" and not a single
"sell." Additionally, Barclays jumped on the bullish brokerage
wagon last Friday, and raised its outlook on the stock to
"overweight" from "market weight." From a contrarian perspective,
this leaves little room for further upgrades, even if the stock
continues to advance.
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Schaeffer's Investment Research
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