Freeport McMoRan (FCX) option implied volatility Elevated at heavy Upside call Volume

Freeport McMoRan (NYSE: FCX) : FCX announced a definite merger agreement to purchase PD on 11/20/06 for $25.9 billion. PRUS says "we assign a one-third likely hood that FCX acquires PD as announced, and a two-thirds likely hood that FCX collects the $750 million break up fee." FCX call option volume of 18,790 contracts compares to put volume of 7,365 contracts, according to Track Data. FCX December option implied volatility of 46 is above its 6-month average of 41 according to Track Data, indicating larger price risks. Paul Foster