Copper ‘lotto tickets’ pay off after Trump shrinks from tariffs
Options traders who bet the Trump administration would renege on its promise to tariff raw copper imports are cashing in big.
On Wednesday evening, more than 31 000 contracts went from out-of-the-money to in-the-money after President Donald Trump shockingly exempted the most widely imported form of copper. The contracts, now with a notional value of $3.54-billion, reflect a significant shift in the copper options market. That’s a sharp increase from Tuesday evening, when only 675 in-the-money put options were recorded, valued at $94.4-million.
It’s a win for bearish traders who believed Trump would back off his tariff vow. It also signals some upheaval for banks and hedge funds that took long paper positions on the assumption that Trump would follow through on his protectionist trade policies.
“It’s pretty amazing — the lotto tickets worked,” said Phil Streible, chief market strategist at Blue Line Futures who has traded copper options and futures for over two decades. “All the tariffs that we’ve seen and many of the policies coming out of the administration have been very fluid in nature with extreme outcomes on both sides of the tail trade.”
Trump three weeks ago said he would levy a 50% tariff on copper imports from August 1, but didn’t specify which products would be covered. While Wall Street piled into trades before the deadline, an expansive lobbying campaign played out in Washington, with US copper producers, semi-finished products makers, scrap yards and foreign governments angling for measures that would benefit their industries, whether it be exemptions, punitive tariffs or a complete abandonment of the tariff.
After Trump’s surprise move Wednesday, copper prices in New York fell the most since at least 1988. Just last week, futures had reached an all-time high of $5.9585 a pound.
Comments
Projects
Latest Multimedia
Latest News
Showroom
Weir is a global leader in mining technology. We recognise that our planet’s future depends on the transition to renewable energy, and that...
VISIT SHOWROOM
Developed to exceed the latest EN 15964 standards for police breathalysers proving that it will remain accurate and reliable for many years to come.
VISIT SHOWROOM
Press Office
Announcements
What's On
Subscribe to improve your user experience...
Option 1 (equivalent of R125 a month):
Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format
Option 2 (equivalent of R375 a month):
All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors
including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.
Already a subscriber?
Forgotten your password?
Receive weekly copy of Creamer Media's Engineering News & Mining Weekly magazine (print copy for those in South Africa and e-magazine for those outside of South Africa)
➕
Recieve daily email newsletters
➕
Access to full search results
➕
Access archive of magazine back copies
➕
Access to Projects in Progress
➕
Access to ONE Research Report of your choice in PDF format
RESEARCH CHANNEL AFRICA
R4500 (equivalent of R375 a month)
SUBSCRIBEAll benefits from Option 1
➕
Access to Creamer Media's Research Channel Africa for ALL Research Reports on various industrial and mining sectors, in PDF format, including on:
Electricity
➕
Water
➕
Energy Transition
➕
Hydrogen
➕
Roads, Rail and Ports
➕
Coal
➕
Gold
➕
Platinum
➕
Battery Metals
➕
etc.
Receive all benefits from Option 1 or Option 2 delivered to numerous people at your company
➕
Multiple User names and Passwords for simultaneous log-ins
➕
Intranet integration access to all in your organisation
