Southern Copper Soars 4.38%—What’s Fueling This Bullish Surge?

Summary
• Southern Copper (SCCO) rockets 4.38% intraday, hitting $94.51
• Q2 earnings beat and $10.2B Mexico investment drive optimism
• Trump’s copper tariffs deepen sector volatility, but SCCO defies the trend
• Options market hints at $37.50 Jan 2026 call’s 34.99% IV surge

Southern Copper’s 4.38% intraday rally has ignited market speculation, defying broader copper sector jitters triggered by Trump’s 50% import tariffs. With a Q2 earnings beat, a $10.2B Mexico investment, and a $1.8B Peruvian project nearing completion, SCCO’s stock is trading near its lower Bollinger Band at $92.07. The $94.51 level marks a 3.5% surge from its intraday low, fueled by a mix of operational discipline, by-product gains, and regulatory optimism.

Earnings Resilience and By-Product Gains Power SCCO’s Rally
Southern Copper’s 4.38% surge stems from its Q2 earnings beat, where GAAP EPS of $1.22 outperformed estimates by 8.9% despite a 2.2% revenue decline. The company’s net income margin rose to 31.9%, driven by a 3% drop in operating costs and by-product revenue from zinc and silver. A 16.7% dividend increase to $1.40 per share further attracted income-focused investors. While copper prices faltered on Trump’s 50% import tariffs, SCCO’s operational discipline and diversified revenue streams insulated it from sector-wide weakness.

Copper Sector Volatility Intensifies as Trump Tariffs Shake Markets—SCCO Leads Amid Uncertainty
The copper sector faces headwinds as Trump’s tariffs on semifinished copper products and derivatives sent shockwaves, with leveraged ETF COPP down 0.34%. Freeport-McMoRan (FCX), the sector leader, rose 1.9% on speculation of reduced global supply. However, SCCO outperformed peers, with its 3.5% rally highlighting its cost advantage and by-product strategy. The iShares Copper and Metals Mining ETF (ICOP) fell 0.51%, underscoring broader sector fragility.

Options and ETFs to Capitalize on SCCO’s Breakout—Technical and Volatility Playbook
• RSI: 21.41 (oversold)
• MACD: -0.67 (bearish divergence)
• Bollinger Bands: Price at $93.73 near lower band ($92.07), suggesting potential rebound
• 200-day MA: $96.95 (current price $93.73 is below, indicating oversold)

Southern Copper’s technicals point to a short-term rebound, with the 200-day MA at $96.95 acting as a key resistance. The RSI at 21.41 suggests oversold conditions, while the MACD histogram (-0.93) hints at bearish momentum but could reverse if volume picks up. Leveraged ETF COPP (-0.34%) offers exposure but remains volatile.

Top Options Picks:
• SCCO20250815C95
• Strike: $95 | Type: Call | Expiration: 2025-08-15
• IV: 34.99% (moderate) | Delta: 0.45 | Theta: -0.118 | Gamma: 0.057 | Turnover: 1,810
• Payoff: At 5% upside (98.42), payoff = $3.42. Delta of 0.45 indicates moderate sensitivity to price moves; high gamma (0.057) means delta will rise rapidly if the stock breaks $95.
• Why it stands out: This call option balances leverage (41.37% ratio) with liquidity (1,810 turnover), ideal for a short-term bullish breakout.
• SCCO20250815C97.5
• Strike: $97.5 | Type: Call | Expiration: 2025-08-15
• IV: 34.92% (moderate) | Delta: 0.319 | Theta: -0.100 | Gamma: 0.052 | Turnover: 1,896
• Payoff: At 5% upside (98.42), payoff = $0.92. Delta of 0.319 offers lower sensitivity but high gamma (0.052) for rapid delta gains if the stock surges.
• Why it stands out: High liquidity (1,896 turnover) and leverage (68.54%) make this ideal for a mid-term hold, with theta decay (-0.100) manageable if the move is swift.

Action Insight: Aggressive bulls may consider SCCO20250815C95 into a break above $95, while SCCO20250815C97.5 offers a safer entry if the stock consolidates near $97.50.

Backtest Southern Copper Stock Performance
The backtest of SCCO's performance after a 4% intraday surge indicates positive short-to-medium-term gains, with the 3-Day win rate at 53.55%, the 10-Day win rate at 54.50%, and the 30-Day win rate at 56.71%. The maximum return observed was 5.12% over 30 days, suggesting that such an event can lead to favorable market movements.

Bullish Breakout or Tariff-Driven Mirage? SCCO’s Path Forward Demands Cautious Optimism
Southern Copper’s 4.38% rally is driven by earnings resilience and by-product gains, but sustainability hinges on navigating Trump’s tariffs and global copper demand. Technicals suggest a short-term rebound toward the 200-day MA at $96.95, while sector leader Freeport-McMoRan (FCX) rising 1.9% signals mixed sentiment. Investors should monitor SCCO’s ability to break above $97.50 and maintain volume above 400K. For now, options like SCCO20250815C95 offer high leverage if the stock surges, but volatility remains a risk. Watch for $97.50 breakout or regulatory clarity on tariffs to gauge next moves.