Nexa Resources’ shares increased by 6.2% to $9.40 in the last trading session, with higher-than-average trading volume. This rise comes after a 31.1% jump over the past month, following Nexa’s sale of the Otavi Project in Namibia to Midnab Resources. Nexa Resources is focusing on profitable assets, improving free cash flow, and following its capital allocation strategy. The company is also looking to expand its copper exploration in Namibia, in addition to its projects in Latin America. Nexa expects to report quarterly earnings of $0.35 per share, which is a 135% increase compared to last year. The company forecasts revenue of $828.12 million for the upcoming report, an 11.8% rise from the previous year. Research shows a link between earnings estimate changes and stock price trends. Nexa’s consensus earnings per share (EPS) estimate for the quarter has increased by 25% in the last 30 days, indicating potential for further growth. In the same sector, Globe Specialty Metals fell 0.8% to $4.72, with a 13.6% return over the past month. Globe’s EPS estimate remains at -$0.07, which reflects a 333.3% decline from last year, and its Zacks Rank is rated #4 (Sell). Given Nexa’s strong momentum and a 31.1% gain over the past four weeks, this signals a bullish outlook for the company. The market rewards Nexa’s strategy of focusing on profitable assets, highlighted by the sale of its Otavi Project. The upcoming earnings report is crucial, particularly with consensus estimates rising 25% in the past month. Today is December 29, 2025. We should consider option contracts that expire after the next earnings announcement, expected in late February 2026. The recent price increase on high volume suggests that implied volatility is high, making call options pricier. Currently, the implied volatility on NEXA’s front-month options has risen to over 55%, well above its historical average. This positive sentiment is supported by strong commodity markets, essential for a mining company. Recently, zinc futures on the London Metal Exchange surpassed $3,800 per tonne, a level we haven’t seen since the third quarter of 2025. Copper prices also remain strong, with data showing that exchange inventories have dropped by 8% over the last month. This situation reminds us of the surge we saw in base metal producers in early 2024 when strong industrial forecasts led to a sector-wide boost. It’s worth noting that this strength seems to be specific to Nexa, as Globe Specialty Metals continues to face negative earnings revisions. This difference indicates we’re backing a company with solid fundamentals, not just benefiting from general market trends. With the stock at $9.40, selling cash-secured puts with a strike price around $9 for February or March 2026 could be a smart strategy. This allows us to earn premiums while taking advantage of high implied volatility. Alternatively, a bull call spread could help us participate in potential upside while managing our risk if the earnings report underperforms.

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