The frenzy in the copper market is luring traders to take high-flying bets that prices are headed back toward a record.
Call options wagering on copper climbing above $10,000 a metric ton by December 2018 have started trading during the past two weeks, London Metal Exchange data show. In total, traders have spent about $4.5 million on the contracts.
Copper hasn’t traded at those levels since 2011, the peak of a commodities boom mainly fueled by a roaring economy in China, the biggest user.
The bulk of the wagers came last week during the mining industry’s annual gathering in London and suggests traders are becoming increasingly bullish on demand driven by electric cars.
“It’s like a lottery ticket,” said Leon Westgate, a senior analyst for base metals and bulks at Levmet U.K. Ltd., said by phone on Tuesday. But “I can understand the rationale, because you can make a pretty strong argument for much higher prices.”
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