Freeport-McMoRan Plummets 2.55% Amid Legal Storm and Copper Market Volatility: What’s Next for FCX?

Summary
• Freeport-McMoRan (FCX) trades at $51.685, down 2.55% as of 19:05 ET, marking its worst intraday performance since December 2022.
• A class-action lawsuit alleging safety failures at the Grasberg mine in Indonesia has triggered investor panic, with the stock trading below its 52-week high of $53.765.
• Copper prices surged to record highs earlier this week, but FCX’s shares underperformed as supply concerns clash with legal risks.

Freeport-McMoRan’s sharp decline reflects a perfect storm of regulatory scrutiny, operational uncertainty, and sector-wide volatility. With the Grasberg mine at the center of a legal firestorm and copper prices teetering on overbought territory, investors are scrambling to assess the company’s near-term trajectory. The stock’s 2.55% drop has pushed it closer to critical support levels, setting the stage for a pivotal test of resilience.

Grasberg Mine Lawsuit Sparks Investor Exodus
The immediate catalyst for FCX’s selloff is a dual-class-action lawsuit alleging that Freeport-McMoRan failed to ensure safety protocols at its Grasberg Block Cave mine in Indonesia. The complaints claim the company’s negligence created heightened risks for workers, regulatory penalties, and reputational damage. With the class period spanning February 2022 to September 2025, the lawsuits highlight prolonged operational and governance concerns. Investors are now pricing in the potential for litigation costs, regulatory fines, and operational disruptions at one of the world’s largest copper mines, which accounts for 3% of global supply. The legal uncertainty has compounded fears of supply chain bottlenecks, particularly as copper prices hit record highs on fears of scarcity.

Copper Sector Volatility Intensifies as SCCO Trails FCX
The broader copper sector is under pressure as Southern Copper (SCCO) declines 2.36%, mirroring FCX’s bearish momentum. While SCCO’s production is not directly tied to the Grasberg mine, the sector-wide selloff reflects shared risks from regulatory scrutiny and supply constraints. However, FCX’s legal exposure creates a unique headwind, widening its underperformance relative to peers. The sector’s sensitivity to geopolitical and environmental factors—such as U.S. tariff threats and mine shutdowns—has amplified volatility, with FCX bearing the brunt of legal-driven uncertainty.

Options and ETFs to Hedge Legal Risks Amid Copper’s Overbought Rally
• RSI: 88.81 (overbought)
• MACD: 2.56 (bullish), Signal Line: 2.02, Histogram: 0.55
• Bollinger Bands: Upper $53.24, Middle $47.13, Lower $41.01
• 200-Day MA: $41.35 (below current price)
• Key Support/Resistance: $41.09–$41.57 (200D), $42.93–$43.21 (30D)

FCX’s technical profile suggests a critical juncture. The RSI’s overbought reading (88.81) and MACD divergence hint at near-term exhaustion, while the 200-day MA ($41.35) remains a formidable support level. Traders should monitor the $49.00 psychological threshold and the $41.01 Bollinger Band floor. For those seeking directional exposure, the iShares MSCI Global Copper Producers ETF (COPX) offers sector alignment, though its liquidity profile is limited.

Top Options Contracts:
• FCX20260102C49 (Call, $49 strike, Jan 2 2026):
- IV: 42.47% (moderate)
- Leverage Ratio: 17.83%
- Delta: 0.867 (high sensitivity)
- Theta: -0.301 (rapid time decay)
- Gamma: 0.083 (strong price responsiveness)
- Turnover: 33,110
- Payoff at 5% Downside: $0.00 (strike above current price)
- Why: High gamma and moderate IV make this call ideal for capitalizing on a rebound above $49.00, with liquidity to ensure execution.

• FCX20260102C50 (Call, $50 strike, Jan 2 2026):
- IV: 33.60% (reasonable)
- Leverage Ratio: 26.65%
- Delta: 0.811 (moderate sensitivity)
- Theta: -0.292 (aggressive decay)
- Gamma: 0.133 (high responsiveness)
- Turnover: 27,469
- Payoff at 5% Downside: $0.00 (strike above current price)
- Why: Strong gamma and leverage ratio position this as a speculative play for a sharp rebound, though theta decay requires a near-term catalyst.

Action: Aggressive bulls may consider FCX20260102C49 into a bounce above $49.00, while hedgers should monitor the $41.01 Bollinger Band floor for a potential short-term bottom.

Backtest Freeport-McMoRan Stock Performance
The backtest of FCX's performance after a -3% intraday plunge from 2022 to the present reveals a generally favorable outcome. The 3-Day win rate is 53.31%, the 10-Day win rate is 51.90%, and the 30-Day win rate is 53.31%, indicating that the stock tends to rebound in the short term following a significant drop. The maximum return during the backtest period was 3.81%, which occurred on day 59, suggesting that while the stock can recover, the pace of recovery may vary.

FCX at Crossroads: Legal Risks vs. Copper’s Rally—What to Watch Now
Freeport-McMoRan’s near-term fate hinges on two critical factors: the resolution of the Grasberg mine lawsuits and the sustainability of copper’s record rally. While the stock’s technical indicators suggest a potential rebound from key support levels, the legal overhang remains a wildcard. Investors should closely monitor the $49.00 psychological level and the $41.01 Bollinger Band floor, with options strategies offering both directional and hedging opportunities. Meanwhile, the sector leader Southern Copper (SCCO) at -2.36% underscores the sector’s shared vulnerabilities. For FCX, the path forward demands a delicate balance between legal resolution and operational recovery. Act now: Position for a rebound above $49.00 or tighten stops below $41.01 to mitigate downside risk.