Indonesia has approved export permits for another five tin smelters, taking the number of smelters allowed to export the metal to 10, hence tin price has fallen from $13,600 to $13,325 today.
I believe that the tin market in Indonesia will continue to improve. If I can sell tin at $14,200 level, I will not mind.
If you sell 2 lot of tin call option at $14,200 June 07,
you can get premium: USD280 x 6 x 2 = USD3,360.
Margin required is USD6,175 x 2 = USD12,350
Yield will be 27% in about 5 weeks' time (when the option expires).
In the situation that tin price goes above $14200, you will have a short position at $14,200, which it quite safe in my opinion. Because in time to come, supply of tin will increase in the global market, and tin price is expected to fall.
And if tin price does not rise above $14200 by 6 June 07, you will get to keep the USD3,360 premium.