Targeting March expiry, traders have placed 1,970 lots of call options at $9,000 per tonne on the London Metal Exchange, giving the holder the right to buy the metal if that level is hit; a further 700 lots are placed at $9,500 per tonne on the LME's Select system.

"The market is just being pulled to the strike price, the option sellers will have to buy and borrow the spread and the position is bigger than the entire LME stocks," Malcolm Freeman, chief executive officer of options broking specialists Kingdom Futures, told Fastmarkets referring to a scenario known as a "gamma squeeze."

Each lot represents 25 tonnes of copper metal, while positioning on the March $9,000 calls has been over 2,000 lots since the start of the year.

The LME three-month copper contract is heading for its biggest weekly gain since 2016, up 7.1% this week at $8,950 per tonne on Friday February 19.

Copper prices have risen sharply today, up 4% with 32,500 lots traded on the exchange.

Recently, options bets have been placed that the metal will hit $12,000 per tonne in July and December.

"We have been pricing up $9,000+ call strikes since the summer, more recently seeing interest out to $15,000. There is a good mix of conviction in the market whilst others are looking at lottery tickets," StoneX head of hedge-fund sales for metals and bulks Michael Cuoco said.

Rising copper prices come as visible stocks of the metal have dwindled due to growing electronics and housing demand. Available copper in LME warehouses amounts to 46,450 tonnes, the lowest in six months.

Meanwhile China Copper, the largest smelting group in China, plans to cut refined production faced with declining treatment and refining charges for concentrate, which have sunk over the past year as smelters expanded production faster than pandemic-hit mines could supply.