Schwab Surges 2.3% Amid Record Earnings and Tariff-Driven Momentum

Summary
• Charles Schwab (SCHW) jumps 2.3% to $95.26, hitting a 52-week high of $97.50
• Q2 revenue grows 25% YoY to $5.85B, with adjusted EPS soaring 56% to $1.14
• Tariff-related trading activity and $80.3B in core net new assets drive optimism

The Charles Schwab Corporation (SCHW) is surging amid a blockbuster earnings report, fueled by 25% revenue growth and a record $1.14 adjusted EPS. With trading volumes up 38% and $80.3B in core net new assets, Schwab is capitalizing on tariff-driven market volatility. The stock trades near its 52-week high, with bulls eyeing a potential breakout above $97.50.

Tariff-Driven Trading Surge and Record Earnings Fuel Schwab's Rally
Schwab's 2.3% intraday gain is directly tied to its Q2 results, which showed a 60% year-over-year profit jump driven by $2.8B in capital returns and a 31% surge in core net new assets. The firm capitalized on heightened trading activity around Trump-era tariff speculation, with margin balances flat at $83.4B and daily average trades rising 38% YoY. Management highlighted $10.4B in reduced high-cost funding and a 23% trading revenue increase as key drivers, aligning with broader market optimism about Schwab's diversified revenue model.

Options Playbook: High-Leverage Calls and Strategic Strikes
• 200-day MA: 79.62 (well below current price)
• 30-day MA: 90.12 (support level)
• RSI: 68.08 (neutral, not overbought)
• MACD: 1.21 (bullish divergence from signal line)
• Bollinger Bands: Price at 95.26 (above middle band at 91.09)

Schwab’s technicals suggest a continuation of its bullish trend, with key support at the 91.09 Bollinger middle band and resistance near the 97.50 52-week high. The RSI remains in neutral territory, while the MACD histogram shows positive divergence, reinforcing the case for a breakout. With $80.3B in core net new assets and rising trading volumes, Schwab’s fundamentals support a short-to-midterm rally.
Top Option 1: SCHW20250725C95
• Code: SCHW20250725C95
• Type: Call
• Strike: 95
• Expiry: July 25
• IV: 23.65% (moderate)
• LVR: 66.08% (high leverage)
• Delta: 0.5332 (balanced sensitivity)
• Theta: -0.2874 (strong time decay)
• Gamma: 0.1193 (high price sensitivity)
• Turnover: 107,898 (liquid)

This call offers a 66% leverage ratio and 23.65% implied volatility, ideal for a 5% upside scenario where payoff would be $2.38 (max(0, 95.26*1.05 - 95)). The high gamma ensures responsiveness to price swings, while the moderate IV balances risk/reward.
Top Option 2: SCHW20250725C96
• Code: SCHW20250725C96
• Type: Call
• Strike: 96
• Expiry: July 25
• IV: 23.28% (moderate)
• LVR: 99.11% (very high leverage)
• Delta: 0.4130 (moderate sensitivity)
• Theta: -0.2391 (strong time decay)
• Gamma: 0.1187 (high price sensitivity)
• Turnover: 53,903 (liquid)

This contract provides a 99% leverage ratio and 23.28% IV, with a 5% upside payoff of $2.76 (max(0, 95.26*1.05 - 96)). The high gamma and moderate delta make it ideal for capturing Schwab’s near-term momentum. Aggressive bulls may consider SCHW20250725C96 into a breakout above $96.

Backtest The Charles Schwab Stock Performance
The backtest of the Schwab U.S. Broad Market ETF (SCHW) after an intraday percentage change greater than 2% shows mixed results. While the 3-day win rate is 49.14%, the 10-day win rate is slightly higher at 51.81%, and the 30-day win rate is also positive at 51.81%, the returns over these periods are relatively modest, with a maximum return of only 0.26% over 30 days. This suggests that while SCHW has a decent chance of positive returns following a 2% intraday surge, the overall impact on long-term performance is muted.

Schwab's Bullish Momentum: Key Levels to Watch for Sustained Gains
Schwab’s rally is underpinned by strong fundamentals and technicals, with the 91.09 Bollinger middle band and 90.11 30-day MA acting as critical support levels. A sustained close above $97.50 would validate a breakout, while a pullback to $91.09 could reignite buying. Sector leader JPMorgan Chase (JPM) is up 0.15%, offering a benchmark for broader market sentiment. Investors should monitor Schwab’s options liquidity and the 95.26 price level for potential entry points. For immediate action, consider the SCHW20250725C95 call as a core position into the July 25 expiration.