Buyers are chasing Southern Copper

optionMONSTER

Metals exploded higher yesterday, and traders were chasing Southern Copper.

optionMONSTER's Heat Seeker monitoring program detected heavy call volume in the Phoenix-based miner, which owns a string of mines and smelting facilities across Latin America.

The August 28 contracts expiring next Friday dominated activity. Almost 3,200 changed hands at the strike, with early blocks fetching as little as $0.04 and $0.05. But then the shares pushed higher, and those calls followed suit.

By the early afternoon, premiums had risen to $0.15, followed by more prints for $0.20 and $0.25. They ended the session at $0.35. Volume was more than triple open interest at the strike.

Calls lock in the price where shares can be purchased, which provides investors with cheap upside exposure. They can also generate significant leverage, which was clearly on display with yesterday's price action. (See our Education section)

SCCO rose 6.56 percent to $27.60 but is still down 32 percent in the last six months. It had been falling on concern about weakness in the broader global economy but popped yesterday after Chinese trade numbers came in much better than expected. (See related story on coal miners .)

Total option volume in SCCO was 6 times greater than average in the session, according to the Heat Seeker. Calls accounted for a bullish 81 percent of the total.

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