Metal broker Rudolf Wolff has recommended buying nickel out of the money call options as a form of insurance against the metal's production cutbacks and rise in prices.``With demand slowing down, your ability to price competitively is all important," William Adams, director of Rudolf Wolff in Japan, said in a statement in Tokyo.
"If you consider the potential upside move, the premium you would be paying is small compared to the higher prices you may well have to pay," he said.He said though Rudolf Wolff was not bullish on nickel, he added it was an opportunity to buy cheap option cover in case fundamentals or sentiment change.
Nickel on the London Metal Exchange (LME) was oversold, heading toward the lows from the 1993 recession when prices reached $4,030, while LME stocks now stood at half of the around 120,000-tonne level seen at that time, he said.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
