October 22, 2025
Freeport McMoRan (FCX) Earnings
Freeport McMoRan (FCX) will report earnings tomorrow before the market open. Here are my thoughts …
First off, the market is under heavy pressure again today as the S&P 500 is lower by 1%, while the Nasdaq is taking the worst of the pain, having traded down 1.5%. Is this the start of a bigger decline? Only time will tell.
In terms of FCX, the stock looks like most stocks these days … what I mean is it is not busting out to the upside but is also not breaking down. Essentially, most stocks, like FCX, have been chopping around as of late.
I am going to hold my position through earnings tomorrow, as our calls don’t expire until May, and option activity has been mostly bullish in FCX. Also, FCX is likely to move more with the price of copper (and gold to a lesser extent) rather than earnings.
FCX - With the stock trading at 40.5, the options market is pricing in a move of $2 this week, or 38.5 to the downside and 42.5 to the upside.
Open interest is skewed bullish on a ratio of 1.3:1 call vs. put.
Skew is pricing in typical downside risk and upside interest.
October 21, 2025
Stock on Watch – General Motors (GM)
General Motors (GM) stock is trading higher by 15% today after reporting quarterly results that beat expectations this morning. This stock spike higher has GM at its highest levels since 2022.
GM is now the first stock on my watchlist for this quarter’s earnings season as a move of 15% in a liquid stock like GM is very intriguing to me.
I am going to continue to watch GM to see if this is just a one-day move, or the start of something bigger (think our WMT buy last year that worked spectacularly following a similar big earnings move).
Finally on GM, option activity is bullish today, though not overwhelmingly so, which leads me to believe I don’t need to race into a position just yet. Though of note, a trader did execute this trade looking for the stock to continue to move higher in the months to come:
Buyer of 2,000 General Motors (GM) January 70 Calls for $2.65 – Stock at 66.
October 20, 2025
Weekly Update
Coming off a nasty close for the market the previous week, the indexes rebounded this last week as the S&P 500 gained 1.7%, the Dow added 1.6%, and the Nasdaq rallied 2.1%.
October 20, 2025
Weekly Update
Coming off a nasty close for the market the previous week, the indexes rebounded this last week as the S&P 500 gained 1.7%, the Dow added 1.6%, and the Nasdaq rallied 2.1%.
What Traders are Saying and Stocks on Watch
Very quickly a new fear popped up in the market last week as worries from two auto-related bankruptcies from earlier in the month started to shake the credit markets and the regional banks. This sent the Regional Banks (KRE) spiraling lower on Thursday and the VIX racing higher (VIX traded as high as 29 on Friday as the banks were at the lows).
And into this move lower in the KRE a trader opened this put buy looking for a big move lower:
Friday - Buyer of 7,000 Regional Bank ETF (KRE) December 50 Puts for $1 – Stock at 59.
Should the KRE fall from 59 to 50 the market is going to be in some big trouble. Though of note, it is possible that this put buy was simply a cheap hedge against something coming loose in the credit markets and regional banks. Hopefully that does not happen as the banks are a critical component of the market’s stability.
Moving on …
As we know, option activity tends to get ahead of takeovers as someone somewhere often gets insider information, and then uses options to profit from that information. And we saw that last week in Hillenbrand (HI) which has been a super sleepy stock for quite some time, yet late last month a trader opened an interesting bull call spread. Here is that trade:
9/26 - Buyer of 10,000 HI November 30/35 for $1.25 – Stock at 25.7.
So how did this trade work out? It worked but it wasn’t a home run, which was interesting. Let’s dive in …
First off, this is a highly suspicious trade as a buy of 10,000 bull call spreads in a stock like HI is HIGHLY irregular.
Then it was announced last week that HI would be taken over for $32 a share, which means the trader made $0.75 per bull call spread purchased, or a profit of $750,000. Not bad. Though …
To be honest, if I had inside information that HI was going to be taken over for $32, I would have instead bought the November 25/35 bull call spread as that would have potentially made more like $6 per bull call spread purchased.
Finally, I want to note wild call buying in Kenvue (KVUE) last week. First, here is that trade, and then a bit of background on this stock and option activity.
Buyer of 50,000 Kenvue (KVUE) November 17 Calls for $0.80 – Stock at 15.35 (partially rolled back from existing November 20 calls).
Now a bit about KVUE. This stock has been falling in recent months as there have been reports that the company was going to miss earnings expectations. Then more recently the stock came under even more pressure when the Trump administration warned pregnant women against using Tylenol, which is one of Kenvue’s leading products. This warning has put KVUE stock in the “doghouse” for investors and the stock traded at a multi-year low late last week.
A buy of 50,000 calls is certainly interesting as a cheap turnaround play. However, I do want to note that there has been wild call buying in KVUE for nearly a year, and those trades have NOT worked. And because of those repeated failures, I am unlikely to get involved.
Volatility
The Chicago Board of Options Exchange Volatility Index (VIX) closed the week at 21, having briefly traded as high as 29 on Friday. That short-term spike on Friday morning was the highest level for the fear index since the market swoon in April/May following the kickoff to the tariff announcements.
And while that short-term spike was concerning in the moment, of greater interest to me is that the VIX settled down late Friday as a close at 25 or above would have signaled big fear headed into the weekend. That being said, should the VIX rise dramatically again this week we may take a more defensive stance with the portfolio.
Option Order Flow was fairly mixed this past week as my Options Barometer came in at:
Monday – 5
Tuesday – 5
Wednesday – 5
Thursday - 5
Friday – 5
Events for the Week to Come
The ongoing U.S./China trade spat will be top of traders’ minds again this week along with the government shutdown, as well as the growing credit concerns that have weighed on the Banks and Regional Banks.
Also, this week earnings season starts to ramp up, led by NFLX and TXN on Tuesday, TSLA and IBM on Wednesday, and INTC on Thursday.
Open Positions
Corning (GLW) March 67.5 Calls – GLW was mostly unchanged last week ahead of earnings on 10/28. The stock and our position remain in great shape.
Coupang (CPNG) March 33 Calls – CPNG continued to slowly bleed lower last week (like many growth stocks), though it still looks good. That being said, we need the stock to get back closer to the 33 level and above.
Of note, Bank of America upgraded CPNG last week expecting earnings to beat expectations.
CSX (CSX) January 32.5 Calls – CSX continued its rise last week following a strong earnings report and the stock is now at its highest levels in months. Our calls are in good shape.
Deutsche Bank (DB) January 36 Calls – DB fell along with the U.S. banks last week on credit fears that swept through the industry. Because our calls expire in January, I’m a touch “worried” that our DB trade could be in trouble. Hopefully the stock and sector stabilize this week and earnings on 10/29 get the stock and our calls back in gear.
Freeport-McMoRan (FCX) May 43 Calls – FCX pulled back marginally last week, though it still looks good. And of note on Friday HSBC upgraded the stock to Buy.
Grab Holdings (GRAB) January 5 Calls (exp. 2027) – GRAB came under pressure last week as growth stocks were hit. That being said, the pullback in GRAB feels normal (for now), and option activity was very bullish all last week looking for the stock to rise in the coming months.
Pfizer (PFE) June 27 Calls – PFE sagged a bit lower again last week, which is not what we were looking for. Because our calls have until June I’m not too worried, though clearly a move back higher would help my confidence in this trade.
Robinhood (HOOD) December 50 Calls – HOOD has come under pressure in the last two weeks along with most stocks. That being said, for now at least this pullback feels normal after a parabolic move higher in the shares the previous month.
Russell 2000 ETF (IWM) January 222 Calls – Despite wild volatility day-to-day (new highs on Wednesday, then hit hard on Thursday) the IWM was mostly unchanged on the week. Of note, the reason the IWM got hit on Thursday is the ETF is comprised of quite a few Regional Banks which were under pressure to close the week.
Regardless, the IWM still looks great and our position is in good shape.
Uber (UBER) December 90 Calls – UBER is once again testing my patience as the stock was rejected at 100 two weeks ago, and since then has been bleeding lower. Time is definitely an issue with our calls.
Finally on UBER, the stock was started at Buy on Wednesday by Guggenheim.
S&P 500 ETF (SPY) December 590 Puts – Much like UBER above, because our SPY puts expire in December time is definitely an issue. Though because of the Regional Bank fears I may hold these puts a couple more days, just in case.
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