Price Forecast:

Bullish Case: Given rising copper demand from renewable energy projects and current backwardation in the options term structure, FCX may benefit from price increases. Increased institutional interest further strengthens this bullish outlook.

Bearish Case: Potential recessionary pressures could dampen copper demand, causing downward momentum for FCX. Current volatility suggests significant market uncertainty, increasing the risk of sharp price corrections.

Potential Outcomes:

• 1) Copper prices rebound, impacting FCX positively (40% chance).
• 2) Economic slowdown reduces demand, lowering prices (30% chance).
• 3) Supply issues spur price increases, benefiting FCX (25% chance).
• 4) Increased competition leads to margin pressure (5% chance).

Trading Oracle: Consider initiating bearish credit spreads utilizing the FCX 12/20/2024 $45C & $47C, targeting potential downside as volatility remains elevated. Alternatively, bullish long debit spreads on the FCX 12/06/2024 $45C can exploit potential upside while limiting risk. Strategically timed entries will leverage market fluctuations and hedging opportunities.

December 05, 2024