Metal Options Update – February 2021

Copper is back in the Limelight

Copper has rallied 80% in the last nine months ‒ from $2.00 to $3.60 in the backdrop of infrastructure spending in the US and increased consumption in China. “Doctor Copper” is once again on the minds of hedgers and position takers as the first wave of vaccinations has been distributed globally.

After an initial sell off in price and spike in volatility, Copper has found a stable volatility range and has experienced a steady rally. While volatility has declined from its peak in late March 2020, current volatility remains in the 20-25% range. The pre-pandemic range for implied volatility was 15-20%.