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MEMO V
To: Prof Lawrence A. Souza
From: Tom Bopp
Date: March 3, 2015
Re: Copper prices expected to rise by 10% over next three months
We are tracking copper prices. Based on our research, we forecast copper prices to rise 10% over the next two months based on the following three factors: Copper prices have continued to fall to near bottom; Copper’s fundamentals look quite solid; People’s Bank of China (PBOC) are slashing rates in a stimulus plan which is expected to bring a rise in copper demand.Therefore, we recommend the following 26 trades:
Indices (3) ETFs (3) Stocks (3)Actions: Buy forwards Buy on margin Buy on margin
Buy futures Buy call options Buy call optionsWrite puts on futures Write put options Write put optionsBuy calls on futures
Trades: 8 8 9Tickers: JJC, CU, CPER COPX, JJC, CUPM SCCO, CCU, SPC
Total Trades: (26)
Copper prices have continued to fall in 2015, to near bottom at a five-year low.
Copper’s fundamentals look quite solid even though there could be a small surplus in the market this year.
Stimulus policy by the People’s Bank of China (PBOC) slashed the one-year deposit rates by 25 basis points to 2.5% and the one year lending rate by the same amount.
We are tracking copper prices. Based on our research, we forecast copper prices to rise 10% over the next two months based on the following three factors: Copper prices have continued to fall to near bottom; Copper’s fundamentals look quite solid; People’s Bank of China (PBOC) are slashing rates in a stimulus plan which is expected to bring a rise in copper demand.Therefore, we recommend the above 26 trades.