The shares of Southern Copper Corp (NYSE:SCCO) are in focus today, after Citi threw down a big double-upgrade to "buy" from "sell," while upping its price target on the copper name to $41 from $33. The analyst in coverage called Southern Copper its "top pick" in the mining sector, and was overall bullish on copper in general. What's more, Goldman Sachs joined in on the fun, reportedly initiating coverage on SCCO with a "buy" rating. These bull notes have triggered frenzied activity in SCCO's options pits.
More specifically, over 2,600 SCCO call options have changed hands today -- seven times the average intraday amount and volume already at a fresh annual high. Most of the attention is on the March 34.56 call, where it looks like new positions are being opened. There is also notable activity at the April 34.56 call and the June 35.56 call. Buyers of the calls expect more upside for SCCO shares in the short term.
Echoing today's trend, short-term options traders are more call-skewed than usual toward Southern Copper stock. This is per its Schaeffer's put/call open interest ratio (SOIR) of 0.30, which ranks in the lowest percentile of its annual range. Drilling down, the March 34.56 call, the leading option today, is home to peak open interest.
On the charts, Southern Copper stock is up 6% to trade at $34.53, on track for its fourth straight win. SCCO has added 19% since a Jan. 3 bottom at $29.01, with the stock breaking out of a channel of lower highs and lows that had begun last April. Today, the shares are set to close above their 80-day moving average for the first time since May.
Despite the double upgrade today, there's still more room for analyst coverage on SCCO. Only five brokerages are currently covering the equity, three of which rate it a "hold" or "strong sell." And the security's consensus 12-month price target of $35.56 is a slim 2.9% premium to its current perch.