A series of put options bought at bearish strike prices served as an indication of potential copper deliveries onto the LME, market sources said after more than 36,000 tonnes of the metal hit LME sheds on Tuesday January 23.
LME stocks surged by 17% when updated warehouse stock data showed several large deliveries on the exchange, notably 24,625 in Busan. In addition, the 28% increase in on-warrant stocks sent three-month prices to a one-month low, below $6,900 per tonne.
Market sources pointed to a sharp increase in put options at $6,800 per tonne and below, bought last week. A put option gives the holder the right to sell derivatives, in this case LME copper contracts at a set "strike" price."Put options being laid on...