China, the largest aluminum-producing nation, has tried to limit smelter construction to curb energy consumption. Over the next several years it could be a challenge for new smelter construction to keep pace with demand growth.
Hence if production of aluminum in China is reduced due to curbing energy consumption, we should see aluminum price breaking new highs.
Al is now trading $2821/ $2826, I would not mind have a long position at $2700.
If u sold 2 lots of Al Put option, strike $2700, Jun07, premium received is 19 x 25 x 2 = USD950.
Margin required is USD4950 x 2 = USD9900.
Yield would be 9.6%.
Earning 9.6% in 1 month's time is very attractive!