Traders caught short of copper, but look for gold to soar, OneWayBet

Spread betting punters doubt that the stock market is going to enjoy its traditional end-of-year rally, and many have positioned themselves for a downward move.

Finspreads said that its clients active in stock indices are mostly short of the Dow Jones Industrial Average and the S%P500 index, and to a lesser extent, the FTSE100.

IG Index reported a subtly different view among its clients. Its punters seem to believe that the stock market is about to break out of the recent range but are unsure whether the move will be up or down.

This view has led people to go long of “strangles” – buying both call and put options on the stock market.

Bookmakers said punters are approaching the end of the year bullish of gold, which today rose by some $10 to $478.50.

If that trade has gone well recently, one that has not is copper, where many traders have been holding short positions as the metal has surged towards 4400, up 10% from mid-September levels.

On foreign exchanges, traders are split on whether the dollar can continue its recent strong run against the euro and the pound.

Sterling has fallen from 1.77 against the dollar, to 1.72, so far in November, while the euro has slipped from 1.20 to 1.1675.

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