Freeport-McMoRan Plunges 2.02%—What Catalyst Could Trigger Such a Sharp Drop?

Summary
• Freeport-McMoRan (FCX) opens at $43.79, plunges to intraday low of $42.675
• Copper sector ETFs like COPP (-1.01%) and COPX (-1.46%) mirror FCX’s bearish momentum
• 52-week high of $52.61 remains distant as refined copper surplus and tariff fears weigh

Freeport-McMoRan’s intraday selloff has drawn sharp focus, with the stock trading at $42.905—down 2.02% from its July 29 open. The move coincides with global copper market turbulence, including U.S. 50% tariff threats and a 97,000-ton surplus in May. Analysts are dissecting whether this is a short-term correction or a structural shift in mining demand.

Copper Sector Volatility Drives FCX's Sharp Decline
The selloff in FCX stems from a confluence of sector-wide headwinds. The U.S. announced a 50% copper tariff effective August 1, sparking fears of reduced demand for North American producers like Freeport-McMoRan. Compounding this, the International Copper Study Group reported a 97,000-ton surplus in May—a reversal from April’s deficit—signaling oversupply risks. Additionally, ETFs tracking copper miners (e.g., COPP, COPX) have mirrored FCX’s bearish momentum, amplifying investor anxiety. The stock’s intraday low of $42.675 reflects immediate profit-taking after its 52-week high of $52.61.

Copper Sector Turbulence as BHP Defies Downtrend
While Freeport-McMoRan fell 2.02%, BHP Group (BHP), a sector leader, rose 0.70%, defying the copper selloff. This divergence highlights FCX’s vulnerability to U.S.-specific risks, such as the impending tariffs. Copper ETFs like COPP (-1.01%) and COPX (-1.46%) also declined, reinforcing sector-wide bearishness. However, BHP’s resilience suggests global miners may be insulated from localized U.S. policy impacts.

Options & ETF Strategies Amid Copper Bearishness
• RSI: 37.58 (oversold)
• MACD: -0.32 (bearish divergence)
• 200-day MA: $40.5969 (below current price)
• Bollinger Bands: $43.1157–$47.0453 (price near lower band)

FCX is in a short-term bearish trend but remains in a long-term range. Key levels to watch include the 52-week low ($27.66) and the 200-day MA ($40.5969). Aggressive short-sellers should consider the FCX20250808P42 put option (strike $42, delta -0.344, IV 35.51%) and FCX20250808P42.5 (strike $42.5, delta -0.262, IV 32.89%).

FCX20250808P42:
• Contract Code: FCX20250808P42
• Type: Put
• Strike Price: $42
• Expiration: 2025-08-08
• IV: 35.51% (moderate)
• LVR: 68.14% (high leverage)
• Delta: -0.344 (sensitive to price drops)
• Theta: -0.00113 (minimal time decay)
• Gamma: 0.139 (high sensitivity to price swings)
• Turnover: 1975 (liquid)
• Payoff at 5% downside: $40.76 → $1.24
• Ideal for capitalizing on a $42 breakdown, leveraging high gamma and moderate IV.

FCX20250808P42.5:
• Contract Code: FCX20250808P42.5
• Type: Put
• Strike Price: $42.5
• Expiration: 2025-08-08
• IV: 32.89% (moderate)
• LVR: 107.32% (high leverage)
• Delta: -0.262 (moderate sensitivity)
• Theta: -0.00377 (low time decay)
• Gamma: 0.1327 (high sensitivity)
• Turnover: 132 (lower liquidity)
• Payoff at 5% downside: $40.76 → $1.74
• Offers higher leverage for a $42.5 target, though liquidity is thinner.

If FCX breaks below $42.675, FCX20250808P42 becomes a compelling short-side play.

Backtest Freeport-McMoRan Stock Performance
The backtest of FCX's performance after a -2% intraday plunge shows favorable short-to-medium-term gains. The 3-day win rate is 50%, the 10-day win rate is 47.85%, and the 30-day win rate is 49.39%, indicating a higher probability of positive returns in the immediate aftermath of the plunge. The maximum return during the backtest period was 2.90%, which occurred on day 58, suggesting that while there is some volatility, FCX can recover and even exceed its pre-plunge levels.

FCX Faces Crucial Crossroads: Watch Key Levels and Sector Shifts
Freeport-McMoRan’s selloff is a warning shot for copper miners amid tariff risks and supply surpluses. The stock’s short-term bearish trend could persist if the 200-day MA ($40.5969) is breached, but its long-term range-bound profile suggests a rebound to $45.08 (middle Bollinger Band) is plausible. Sector leader BHP’s 0.70% gain offers a counterpoint to FCX’s struggles. Investors should monitor the 52-week low ($27.66) and U.S.-China trade talks. For now, short-term bearishness and key options like FCX20250808P42 remain focal points.