Funds are having a hard time navigating copper’s current choppy trading patterns.
They flexed out short positions in both late January and earlier this month as the copper price threatened to break on the downside only to be whiplashed in the subsequent sharp rebounds.
It’s not the first time it has happened. Indeed, fund positioning on the CME copper contract has swung between bearish and bullish for many months as the price gyrates in a well-trodden range.
Investor positioning has moved in tandem with copper’s sporadic attempts to break out of that range, suggesting a preponderance of momentum-tracking funds at work.
Longer-term players looking to buy into copper’s bull narrative are avoiding the daily churn, preferring to bide their time in the longer-dated options market.
COPPER CHURN
Funds turned bearish on the CME copper contract in January but were forced to cover as the London Metal Exchange (LME) price bounced off support at $8,250 back up to $8,705 per metric ton.
They turned even more bearish at the start of February, lifting outright short positions to a four-year high of 95,825 contracts.
This time the price did break lower but only to stage another sharp recovery back above $8,600 per ton.
Short positions have been sharply reduced again and long positions rebuilt. The net investor short position contracted from 42,309 contracts to just 8,807 in the most recent Commitments of Traders Report.
LME copper is currently trading around $8,475 per ton, back in the middle of the $7,850-8,900 range that has defined the price action for almost a year.
Managed money positioning on the CME has been chopping between long and short in tandem with copper’s sporadic rallies and declines within that range.
There is no shortage of longer-term copper bulls looking to bet on the metal’s central role in the clean energy transition but the current price dynamic is discouraging any big directional play.
At least in the futures market.
UPSIDE BIAS
The positioning landscape is very different in the LME copper options market, where there is a clear bias to the price upside.
Open interest on call options, conferring the right to buy, totals 90,309 contracts through the end of this year. That on put options, conferring the right to sell, stands at 46,685 lots as of Friday’s close.
The ratio is higher in 2025 with 9,137 lots of call options dwarfing 874 lots of put options.
Options, like futures, are tools for the copper supply chain to hedge its exposure to copper price fluctuations and a good part of LME open interest will reflect that activity.
But it’s also clear there are some long-term speculative players in the mix as well.
SUPER BULLS
LME copper options open interest is heavily weighted towards the front end of the price curve with the exception of December 2024 and December 2025.
There are 31,416 lots of options expiring in December this year, making it the second most liquid month on the curve next to fast-approaching March.
Call open interest of 22,169 lots overshadows the 9,247 lots of put positions.
The most popular strike price for the calls is $11,000 per ton with 4,681 lots of open interest, followed by $10,000 with 3,950 lots.
Some players are aiming much higher with 2,676 lots of open interest at the $12,000 strike, 913 at the $14,000 strike, 250 at the $16,000 strike and 150 at the $18,000 strike.
Topping them all, however, are the super-bulls on the $20,000 strike, where there are 400 lots of open call options.
The price for December 2024 copper was valued at $8,553 per ton at Monday’s close.
No-one’s gone quite that high in December 2025 where options positions have also been accumulating.
But there is a significant position on the $14,000-per ton call strike, which has 5,600 lots of open interest, equivalent to 140,000 tons of copper.
December 2025 was valued at $8,582 per ton at Monday’s close.
The distance between option strike and current price makes it very unlikely these positions are industrial hedges.
Rather, it looks like speculators taking a long-dated punt on the copper price.
OUT OF THE CHOP
It’s not hard to see why longer-term investors have fled the chop of the short-term futures action for the quiet of the far-dated options market.
Copper is locked in an extended pattern of indecision, caught between a negative macro outlook and a more positive micro picture of supply disruption and buoyant green demand.
It’s that combination of constrained supply and fast growth in energy transition demand that is top of mind for funds looking for higher prices once the macro gloom lifts. And in some cases much higher prices, judging by some of high-strike call option positions taken.
So if you’re wondering where all the super-bulls have gone, they’ve not left, just moved down the forward curve, betting on a much brighter copper future.
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