Most Active Options Update: Freeport-McMoRan, JPMorgan Chase, and Exxon Mobil

Of the 20 equities seeing the heaviest options volume in recent sessions, three names of notable interest this afternoon are Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX), JPMorgan Chase & Co. (NYSE:JPM), and Exxon Mobil Corporation (NYSE:XOM). Here is a quick look at today’s interesting activity in these options pits.

Copper prices are heading south today, as investors express caution ahead of China’s purchasing managers’ index (PMI), slated for release this weekend. Mining magnate Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX) is being pressured lower, with the stock off 1.6% at last check to trade at $31.33. The downward trajectory hasn’t deterred option players from betting on a quick rebound, with optimists targeting FCX’s out-of-the-money (OOM) June 32 call. A healthy portion of the 1,670 contracts traded have crossed at the ask price, implied volatility has ticked higher, and data from the International Securities Exchange (ISE) confirms that a portion of the positions have been bought to open. Based on the volume-weighted average price (VWAP) of $0.68, FCX must rise above $32.68 (strike plus VWAP) in order for these traders to turn a profit. Technically, FCX continues to feel the weight of its 20-week moving average. This trendline has been ushering the stock down the charts since early December, and put a quick stop to the equity’s most recent rally attempt. Meanwhile, reports have emerged today that another collapse has occurred at the company’s Grasberg mine in Indonesia — the second such event since mid-May.

Like sector peer Citigroup Inc (NYSE:C), JPMorgan Chase & Co. (NYSE:JPM) had its price target raised by Bernstein today (by $6 to 62). The stock has not been able to capitalize on the bullish note, though, and heading into the final hours of the session, JPM is down 0.6% at $55.28. There are some longer-term struggles ahead, according the group of option traders that are picking up the December 52.50 puts. The majority of the 2,012 contracts traded have done so at the ask price, and volume is outstripping open interest, pointing to the initiation of new bearish positions. The VWAP for the OOM puts is $2.69, meaning JPM must travel south of breakeven at $49.81 (strike less VWAP) for the options to be profitable. Puts have been popular in JPM’s short-term options pits, as well. The equity’s Schaeffer’s put/call open interest ratio (SOIR) of 1.11 ranks in the 77th percentile of its annual range. In other words, speculators are more put-heavy than usual among options expiring in three months or less.

Exxon Mobil Corporation (NYSE:XOM) has spent almost the whole month of May perched atop the round-number $90 mark, but option players in today’s session are betting on this newfound level of support to falter in the near term. Of the 4,772 weekly 6/7 90-strike puts that have been exchanged, a good portion have gone off at the ask price, and only 122 contracts currently make up open interest here, pointing to buy-to-open activity. The VWAP for the OOM puts is $0.28, making breakeven $89.72, or 2.2% below the stock’s current perch at $91.72. Delta for the option is docked at negative 0.22, or 22%, meaning the put has about a 1-in-5 chance of landing in the money ahead of next Friday’s close.

The 20 stocks below have attracted the highest options volume — in the front three-months’ series — during the past 10 trading days. Data is courtesy of Schaeffer’s Senior Quantitative Analyst Rocky White.   Karee Venema.