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FCX Copper Play: The Debit Spread With Multi-Week Momentum Confirmation
Sometimes the best trades aren't the flashy ones making headlines — they're the methodical setups backed by solid institutional accumulation.
That's exactly what we found with Freeport-McMoRan (FCX), where a compelling Feb. 20 expiration, $63 / $65 call debit spread at 69 cents emerged from weeks of smart money positioning.
The beauty of this trade lies in what the open interest data shows.
While many traders focus solely on price action, the real story often unfolds in the options flow — and FCX's $65 strike calls have been building consistently since Jan. 13, with numerous additions between Jan. 15-26.
This isn't random retail buying — it's sustained institutional accumulation.
Reading the Open Interest Tea Leaves
Here's what makes this setup compelling: The open interest is all still there.
Even as FCX pulled back slightly from its recent highs, those institutional players haven't exited. Their positioning suggests conviction in the longer-term move.
I always tell traders to copy and paste option contracts from your option chain into your chart and add the open interest study to visualize this accumulation.
You want to see the build-up and continuation of positions, because if traders exit, then the
run is likely done.
The technical picture aligns well with this institutional interest.
FCX recently nearly hit $64 and came off that level, touching $63.45 before the latest pullback.
That creates an attractive entry point for the spread.
The Risk-Reward Mathematics
The $63 / $64 spread costs 38 cents, while the $63 / $65 spread runs 70 cents, though we managed a fill at 69 cents.
The wider spread gives us more room to work with.
For profit targets, you need FCX to reach $62.50 for modest profit, but if it hits $64, we'd be in strong shape.
Given that FCX recently came off $64, reclaiming that level isn't unrealistic — especially with the institutional positioning we're seeing.
The spread structure offers defined risk while providing solid upside potential. The spread costs about a third of the price compared to buying calls outright, making it an efficient way to play copper's momentum without excess risk.
This isn't a day-trade setup — it's a swing position designed to capitalize on the multi-week institutional accumulation pattern.
The Feb. 20 expiration gives the trade room to breathe while aligning with the timeframe smart money appears to be targeting. | | | | |
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