A massive aluminum options trade has delivered a windfall as the conflict in Iran sent prices surging 8.9% this week. The position, which stunned dealers when it appeared last week, has rapidly come into the money amid a rally that pushed aluminum to a four-year high of $3,418 a ton. Aluminium Bahrain suspended sales after shipping through the Strait of Hormuz effectively halted.

Qatar's state-owned producer had already stopped production due to domestic gas shortages, and traders warn of global supply disruptions unless the vital waterway reopens. Exchange data shows open positions for 663,800 tons of aluminum at $3,300 in April contracts, with prices trading at $3,389 by Friday. The trade, estimated to have cost about $40 million upfront, could yield gross profits of $59 million if prices hold, or $133 million if aluminum reaches $3,500 a ton.

Investors have been placing bolder wagers across copper, gold and silver markets, with call spreads surging in popularity as a relatively cheap way to bet on rallies. Such large positions are rare in aluminum, where prices typically face resistance as producers sell futures. But investors have grown more bullish as China approaches production caps and recent smelter closures create regional shortages in Europe and the US. The conflict in the Gulf, which supplies nearly 20% of aluminum used outside China, now threatens a much sharper rally.