CHINESE SHARE SCARE: Price swings could give fresh impetus to copper options trade

The outright price swings in copper that we have seen this week have also caused options volatility to surge, and after a moribund period of trading in London Metal Exchange options over the past few months, this area of the market looks set to become more active.

After the violent drop in prices in January and the subsequent rebound, several funds have been expressing a bearish view on the market using out-of-the-money put options, which offered cheap, low-risk exposure to a drop in prices, particularly while the copper contract was trading above $6,000.

Some of those positions have now either come into the...


Mark Burton

July 09, 2015

16:29 GMT