Long Copper with a Hedged Bear Put Spread

about 1 month ago

Unknown Speaker

"The trade idea that I proposed was going long copper here and hedging it out, with a four fifty by four and a quarter bear put spread, which is literally trading for two months out for under five cents under a nickel."

An explicit commodity trade call is discussed where the strategy is to go long on copper while hedging downside risk using a bear put spread with strikes at 4.50 and 4.25. The idea is based on a bullish outlook for copper in a reflationary environment, while managing risk given the relatively low probability (around 20%) of copper falling below the lower strike.