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Tony Zhang Links Copper Rise To Freeport-McMoRan Option Opportunity

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On CNBC's "Options Action," Tony Zhang said he sees an opportunity to get a long exposure in Freeport-McMoRan Inc (NYSE: FCX) and wants to use options to do so.

Zhang looked at the copper-to-gold ratio and he noticed it broke above its 200-day moving average and also above its major resistance. Zhang said Freeport-McMoRan is currently trading around its major resistance level of $20 and he expects the stock to move higher and reach $24.

To make a bullish bet, Zhang wants to buy the January $20/$24 call spread for $1.25. The trade breaks even at $21.25, or around 5.5% above the current stock price. If the stock jumps to $24, or higher, the trade would reach its maximum profit of $2.75.

 

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Posted-In: CNBC Options Action Tony ZhangLong Ideas Options Markets Media Trading Ideas