Jeff Kilburg's Nickel Trade

On CNBC's "Futures Outlook," Jeff Kilburg recommended a long futures position in nickel.

He said there are typically two types of demand for nickel, the manufacturing demand based on China and the infrastructure demand. Now, there is also a third source of demand, and that is Tesla Inc TSLA.

See Also: Tesla Offers 'Giant Contract' To Any Company That Can Efficiently Mine Nickel

He wants to buy the September contract at $13,500, with a stop loss at $13,125 and a target price at $14,250. His risk-reward ratio is 2 to 1 as he is risking $2,250 to make $4,500.