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1) more leverage with options 2) if the price does not move, the option position still shows a profit

For any directional bet, I think this is absolutely false. In fact, the whole premise of being able to forecast for short time horizons grew an entire subsector of the marketplace wth participants called high frequency traders.

Here is one of the most in-depth analyses of the copper market: http://www.futuresmag.com/2014/01/10/chinese-copper-imports-go-it-alone?eNL=52d035ecdd9aa4556f00014b&_LID=1117742 Bottomline: Quite a bull-bear struggle.

The only problem with these positions lately: LOW VOLATILITY. That favors options BUYERS, not sellers. Selling weeklies is a good idea since you are not exposed to a long period of time. If you are going with a single leg (credit spread), it's still a directional position and your success will...

B is correct. You must consider the option premium earned. For instance as volatility increases, your risk reward ratio will improve. If you use the A computation, that is not considered.

Copper UP 4 pennies this morning. USD flattish. However, ONCE AGAIN, LME stock levels are lower...now at 348,250 metric tons. Rock 'n roll boyz.....this is getting pretty crazy.

Copper down huge today despite very low stock levels at the LME (351,000 tons). All contract months on the CME are down about 5 cents. Copper miner index (COPX) continues to plunge as well...now under 9. The USD is flat, so this move is not currency-related.

I love that shot of Kate - "GND": Girl Next Door look. She's such a natural beauty....no make-up in that picture. And check-out those curves.

Copper hits near 2-week low on LME on China fears LONDON--Copper futures fell to their lowest level in almost two weeks on the London Metal Exchange Monday, weighed by concern over demand for the metal from top consumer China. The LME's flagship three-month copper contract fell 0.5% to...

Wow, you have a real keen sense of how to trade that market. Well done.

That kind of leverage is suitable only for HFT or very short term trading (< 15 minutes). So the big bets are OK as long as the risk is quite defined and capped by the time-frame to some degree. Holding overnight with that kind of leverage is definitely suicide. Of course, you could always...

re: low inventories - as I mentioned in a prior post, there is so much "off-the-books" of horded copper, it's not even funny. Once those players see the price going down, they're gonna dump it fast. re: recovering economy - are you talking the USA ? It doesn't consume half the copper of China...

My take is that the price action in light of the declining inventories has been very weak on the upside. Indeed, we are down 3 pennies today....and I don't think it's because of the USD. Finally, what happens when inventories STOP going down ?

Dennis Gartman keeps pounding the table for a continued weaker Yen. However, I look at the chart for JPY/USD and the yen looks hugely oversold. I remember that not so long ago when it was trading 98-99. Best to wait for a bounce, or pounce on the short side right now ?

The most hated monetary instrument on the face of this planet has to be the U.S. dollar. http://www.marketwatch.com/story/2014-the-year-of-the-dollar-2013-12-27?link=mw_home_kiosk Favorable for short copper positions: higher dollar = higher cost of dollar-denominated copper for China...

Copper stock levels continue to plummet as shown on the LME. The current level is 367450 tonnes (metric). This has caused even a sharper contango in contract pricing on the CME.

Wallstreet Journal Article: As Shadow Storage Grows, Exchange Inventories Lose Their Usefulness http://blogs.wsj.com/moneybeat/2013/12/27/as-shadow-storage-grows-exchange-inventories-lose-their-usefulness/?KEYWORDS=metals+copper+inventory Only owners of shadow warehouses and large clients...

Morning Copper Market Report Thu 26 Dec 2013 06:33:16 CT Sharp gains this week have come after a month long run up in prices and the gains also appear to have taken place in the wake of a possible shift in copper positioning, from a net spec short, to a net spec long...

December 26, 2013, 9:57 a.m. ET Copper Futures Rise on U.S. Labor Data, Weak Dollar --Comex March copper up 0.4% at $3.3880/lb --U.S. weekly jobless claims fall more than expected --Weak dollar boosts copper's allure to foreign buyers NEW YORK--Copper futures rose Thursday, drawing...

LME Stock levels are at 371,975 metric tons.....which are very low and I am sure this is helping to support prices. The March '14 CME contract almost hit $3.40 this morning.