Massive Feb Put Spread in FCX

Massive Feb Put Spread in FCX

Earlier today, Freeport MacMoran (FCX) was trading at 8.25.? The stock, which has an ADV of 67,500 and an average open interest of 1.5 million, saw a massive put spread trade in February.?? A customer sold the Feb 7/6 put spread 35,000 times collecting .25 on the spread.

The trader is betting that FCX is going to stay above 7 dollars a share now between and February expiration.? It is also a bet that FCX, which has been moving around a lot will slow down.? The risk to the trader is a drop in the underlying below 7.00 a share.? At 6.00 a share, this trader would be on the hook for .75 35,000,000 times, call it a cool 26 million dollars.

This trade should be considered bullish and aggressively bearish volatility