I like it how reporters state the facts but frame it a certain...

I like it how reporters state the facts but frame it a certain way to make it sound irrelevant.

"And some of it is sitting on strike prices as high as $4,500 (September) and $4,400 (December). But the tonnages are relatively modest at 2,500 tonnes and 8,575 tonnes respectively."

The question is what is the payoff if those traders are right? Let's have a look.

Those call options are 1) short dated and 2) way out of the money.  That means the premium is likely to be worth 1 cent in the dollar or less.

Therefore, the call options would cost at most $45 dollars per tonne i.e. 1 cent in the dollar.

Now, if the price of Zn reaches $4500 per tonne, the premium (cost of the call option) would be close to $0.50+.  It could be higher because volatility will be high, but offsetting that is  how close we are to expiry.

So, the price of the option will rise to $2250 or more.  

Those traders have paid US$489,800 to buy those options and if they are right, they stand to be able to sell those options back out to the market for US$25 million dollars.

The reporter must be a billionaire to call that modest.