April 24, 2025
Freeport McMoRan (FCX) Earnings Reaction and Stocks on Watch (GE and MMM)
Freeport McMoRan (FCX) is trading higher by 7% today following reporting earnings this morning. This positive stock reaction could be tied to those earnings results, or because the market is soaring higher for a third straight day. To be honest, I don’t truly care what the reason is, as higher is good no matter the catalyst.
Of greater interest to me than the reason FCX is rallying is the very bullish option activity in the stock today, including this buy:
Buyer of 5,000 Freeport McMoRan (FCX) June 40 Calls for $1.50 – Stock at 36.5
In terms of potential new buys, my watchlist is starting to grow again as the market strengthens and earnings season gets in gear. That brings me to General Electric (GE) and 3M (MMM), both of which soared higher following earnings earlier this week, and yesterday, a trader/traders bought these calls looking for further gains in the months to come:
Buyer of 3,000 General Electric (GE) June 200 Calls for $7.60 – Stock at 194
Buyer of 20,000 3M (MMM) September 125 Calls for $20.50 – Stock at 139 (rolled from June calls)
Leading industrial stocks like GE and MMM getting in gear would be a very positive sign for the market. Maybe, possibly, this market is ready to get back in gear.
April 23, 2025
Freeport McMoRan (FCX) Earnings
Freeport McMoRan (FCX) will report earnings tomorrow before the market open. I am going to hold my position through the event as the market has been shaping up a bit the last couple days (maybe … possibly) on hopes of the tariff situation cooling off.
And on that tariff situation, FCX would be a huge beneficiary of deals getting done as FCX moves with the price of copper, and copper is a strong global economic play. And on that point, I wouldn’t expect earnings tomorrow to be a big driver of FCX’s stock movement, and instead, the stock will move with the state of the global economy and the market.
FCX - With the stock trading at 35.5, the options market is pricing in a move of $1.70 this week, or 33.8 to the downside and 37.2 to the upside.
Open interest is skewed bullish on a ratio of 1.7:1 call vs. put.
Skew is pricing in typical downside fear and upside interest.
April 21, 2025
Weekly Update
Despite an onslaught of tariff headlines and rumors, the holiday-shortened week was mostly quiet outside of a nasty sell-off on Wednesday. By week’s end the S&P 500 had lost 1.5%, the Dow had fallen 2.7% and the Nasdaq had declined by 2.6%.
Stocks on Watch
There is no question that the number one stock on my watchlist is Uber (UBER) as the stock has continued to outperform its tech peers and is just short (kind of) of its 2025 highs. In addition, option activity was bullish all last week, including these trades:
Friday - Buyer of 6,000 Uber (UBER) June 80/100 Bull Call Spread and Sale of June 60 Puts – Stock at 75 (bull risk/reversal)
Thursday - Buyer of 3,000 Uber (UBER) November 95 Calls for $3.55 – Stock at 75
Wednesday - Buyer of 4,000 Uber (UBER) June 82.5 Calls for $2.40 – Stock at 74.
And while I’m super intrigued by the prospect of buying UBER, it’s going to be hard to add any positions right now as the market continues to be a sloppy mess. Essentially, the playbook of late has been a handful of the best-looking stocks coming to life and showing promise, but then the sellers seemingly pouncing on that strength when the market again weakens.
Stepping back, we need the market to get in gear, otherwise most stocks including UBER will continue to chop around aimlessly and decay will eat calls/options alive.
In addition, given the earnings tidal wave that is coming the next couple weeks I’m not in a giant rush to buy a bunch of positions as the emerging winners will pop to life after reporting quarterly results.
And finally, I do want to highlight the interesting battle in Nike (NKE) options, which is a stock I’ve flirted with buying but haven’t yet as call and put buyers continue to send mixed messages. Here are a couple trades from late last week that highlight this somewhat confusing situation for me:
Friday – Buyer of 3,000 Nike (NKE) August 55/67.5 Bull Call Spread for $4 – Stock at 54
Friday – Buyer of 3,000 Nike (NKE) May 57.5 Calls for $1.76 – Stock at 55
Thursday – Buyer of 9,000 Nike (NKE) May 52.5/45 Bear Put Spread for $1.50 – Stock at 54.5.
Essentially, I continue to see a few days of very bullish option activity and I become super interested in the stock, but there are also big put buyers which somewhat turn me off to getting involved.
I think NKE is a pure play U.S./China tariff deal play which explains the call and put buying as traders bet on a deal getting done, or not, via NKE options.
Volatility and What Traders are Saying
The Chicago Board of Options Exchange Volatility Index (VIX) closed the week at 30, which was lower on the week though is hardly an all-clear signal for the bulls. And coming off the recent VIX spike above 60, Bloomberg Finance looked back at previous large spikes in the VIX and how the market performed post that surge in the fear index.
Bloomberg Finance: After VIX surges, the S&P 500 rose 85% of the time over the next few months. The 15% where it didn’t coincided with recessions:
Hopefully the U.S. economy doesn’t slide into a recession this year, though of note, Wall Street firms have been dialing back their year-end targets for the S&P 500 recently, via Bloomberg and the Financial Times:
Option Order Flow was fairly mixed this past week as my Options Barometer came in at:
Monday – 5
Tuesday – 5
Wednesday – 5
Thursday - 5
Events for the Week to Come
This week, like previous weeks, will be all about tariffs and rumors regarding tariffs. This is starting to get tiresome as a return to “normal” trading conditions would make trading so much easier.
Also of interest this week, earnings season starts to heat up led by Tesla (TSLA) on Tuesday, Boeing (BA), IBM (IBM) and ServiceNow (NOW) on Wednesday, and Intel (INTC) and Google (GOOG) on Thursday.
Open Positions
Freeport-McMoRan (FCX) November 43 Calls – FCX rose modestly last week ahead of earnings this Thursday. Of note, on Wednesday of last week the stock was raised to Outperform at Wall Street firm Wolfe with a price target of 39.
Grab Holdings (GRAB) January 5 Calls – I keep saying this, but I think GRAB looks pretty good given the market carnage. That being said, we need the stock to get going otherwise option decay will continue to eat our calls alive.
Marvell (MRVL) June 115 Calls – As I’ve written in weeks past, I don’t have much hope for our MRVL calls as we would need a dramatic move higher for these calls to come alive.
Financials ETF (XLF) June 50 Calls – The XLF has rebounded nicely from the lows of three weeks ago, and so far earnings season has been pretty good for the financial stocks. That being said, we really need the market to get in gear for the XLF to get in range of previous highs.
Jets ETF (JETS) January 26 Calls (exp. 2026) – Recession fears continue to weigh on the JETS ETF and airline stocks. While we have plenty of time until expiration, my patience with this trade is growing thin.
Starbucks (SBUX) January 110 Calls – What I wrote about the JETS above is nearly identical for SBUX as the stock seemingly can’t get in gear as the recession talk ramps up across the economy and the trading world.
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