Spotlight On Copper

By Craig Bewick
FEB 19 2021

Once again, US Equity Indexes struggled to find direction toady and wound up closing mixed.  On the week, the price of the March E-mini S&P 500 was down slightly while volatility in the options ticked up and the E-mini Nasdaq-100 futures price was down about 1.5% while volatility in the March options rose from 21.3% to about 23%.  Other notable weekly moves include:

  • Bitcoin futures which were up another 16% and volatility in the options came down but remains over 100%
  • April Copper futures prices rose 7.4% and volatility in the options rose from about 23.6% to about 30%

Rather than a comprehensive recap of the week as we often do on Fridays, we’re going to switch gears and focus on that move in Copper futures that we mention above.  As you can see in the QuikStrike graph that illustrates 10 Years of Copper price and volatility (modified with the yellow lines to denote the current level), the metal is trading at the highest price level that we’ve seen since September of 2011 (orange line).  Further, the blue line illustrates the implied volatility in the options which is at levels we’ve only seen a couple of times in the last 10 years.   We don’t see a dramatic move in the Copper options skew, though the 25 Delta Calls are trading about 1.5% over the Puts.  Remember, traders wishing to gain exposure to the price of Copper can trade both futures and options on CME Group’s Globex match engine. 

We hope all of our In FOCUS readers have a great weekend and we’ll see you next week.

ABOUT THE AUTHOR

Craig Bewick has spent 25 years in futures and options markets, starting at CBOT and CME working in risk management, regulatory, technology, product management and client development. 

Connect with Craig at activetrader@cmegroup.com

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