Copper option trading is booming. Average daily volume (ADV) surged 36% in 2023 to nearly 5,900 lots traded per day, building on a strong five-year compounded annual growth rate (CAGR) of 33%. So far in 2024, average daily volume has increased by a further 72% over the entirety of 2023 and stands at just over 10,100 contracts year-to-date. A single day record of 54,075 Copper option contracts traded on March 13, 2024, shattering the previous 25,010 record set in May 2021.

With increased volume comes increased position holders. Open interest in the Copper option (HX) contract reached a series of consecutive record highs culminating with a new record high water mark of 209,992 contracts on March 22, 2024. This new record surpassed the previous high of just over 180K set on February 21, 2023.  Including the weekly option contracts, average daily open interest in Copper option contracts has surpassed 123K in 2024, eclipsing the average daily open interest of 2023 by nearly 15%.

Traditionally, options on Copper futures have had monthly expiries. In 2014, CME Group introduced Friday Weekly option expiries on Copper futures. Since then, weekly expiries have been added for every day of the week, with Tuesday and Thursday expiries being the latest addition to the Copper option suite.  Today, copper participants are able to manage their risk using options for every day of the week, for up to four weeks.

Copper Monthly option contract: HX

Copper Weekly option contracts:

• Monday: H1M, H2M, H3M, H4M, H5M
• Tuesday: H1T, H2T, H3T, H4T, H5T
• Wednesday: H1W, H2W, H3W, H4W, H5W
• Thursday: H1R, H2R, H3R, H4R, H5R
• Friday: H1E, H2E, H3E, H4E, H5E

Copper option markets are available electronically through CME Direct with Request for Quote (RFQ) capability, or negotiable off-market, and cleared through CME ClearPort as block trades.

CME Group offers tools that can offer insight into market dynamics and sentiment based on positions held in Copper options.

Interactive option analytics tool users can use to analyze open interest and open interest change patterns for each expiration within the selected product.

Users can also gauge market sentiment through Put and Call option open interest and volume by expiry.

Derived from the world’s most actively traded options on futures contracts across major asset classes, CME Group Volatility Index (CVOL) delivers the first-ever cross-asset class family of implied volatility indices based on simple variance. Using our proprietary simple variance methodology that assigns equal weighting to strikes across the entire implied volatility curve, CVOL Index produces a more representative measure of the market’s expectation of 30-day forward risk.

We publish the following CVOL Indices and indicators for both the end-of-day benchmark and the live streaming Index:

• CVOL Index
• Up Variance (UpVar)
• Down Variance (DnVar)
• Skew
• Convexity
• At-the-Money (ATM)

Find out more about CVOL by visiting our website.

^{Source: CME Group Volatility Index (CVOL) powered by QuikStrike, March 20, 2024}

Adoption of CME Group Copper option products has been accelerating in 2024. Volume and open interest in the traditional monthly expiry contract have hit all-time highs. Weekly expiries for every day of the week are gaining traction and provide participants the ability to hedge risk at a more precise level.  Whether you need to hedge longer term risk or short-term exposure in the Copper market, CME Group provides robust, transparent option markets and the tools necessary to help users make educated decisions to mitigate their risk.

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