By David Russell of OptionMonster
NEW YORK -- Southern Copper (SCCO) has been running hard, and the bulls were looking for more upside on Friday.
OptionMonster's tracking programs detected the purchase of almost 15,000 September 37 calls, dwarfing the previous open interest of just seven contracts. Premiums rose from 90 cents to $1.10 as the trades crossed.
These calls lock in the price where shares can be bought in the Phoenix-based metals company, providing upside exposure with limited risk. They can also produce significant leverage if a rally ensues.
Southern Copper's stock rose 2.15% to $32.32 on Friday and is up 16% since the beginning of the month. Materials have quietly become the strongest sector in the broader market as investors look for the global economy to improve. Copper miners have also started to rally following years of underperformance.
Total option volume in the name was almost eight times greater than average in the session, with calls outnumbering puts by a bullish 10-to-1 ratio.
Russell has no positions in SCCO.