This trade is a bet that FCX will not drop below 6.00 between now and Feb expiration
Freeport-McMoRan (FCX) is trading 6.53, up .06. FCX has an IV30 of 91.35, an HV10 of 81.35, an ADV of 71,200 and open interest of 1,600 million contracts. Earlier today, FCX saw a large put spread trade.? The Feb 6 puts were sold at .72 a contract and the Feb 5 puts were bought for .42 a contract at the top (although the spread traded better in small blocks.? Net the customer sold the Feb 5/6 put spread at a low of .30 about 73,000 times.
This trade is a bet that FCX will not drop below 6.00 between now and Feb expiration and that FCX at the worst might see a price of 5.70 trades.? The customer appears to be doing this as an income generation tool.? He or she may also be willing to buy the stock between 6 and 5 dollars a share.
This trade is mildly bullish FCX and aggressively bearish FCX volatility.