MP Sees $818K Call Spread Bet With 30.7% One-Day Gain: Technicals and Skew Remain Bullish

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High-Volume Call Spread Delivers Quick 30.7% Gain

A major options trade on MP Materials Corp. (MP) grabbed attention this week: a sizable call spread saw a remarkable 30.7% gain in less than an hour, thanks to a swift 3.57 point move in the stock. Here's what stood out:

The trader paid just under $820K to enter this 95-110 call spread, and by 10:15AM the value of the spread was up nearly $505K. For max profit, MP must be above $110 by October 17, 2025. To dig further into this specific trade, check out the multi-leg trade analyzer.

Trade Rationale: Limited-Risk Bet on a Near-Term Move Higher

This type of spread allows a trader to make a leveraged, capped-upside bet on a further rally—paying $2.94 for the chance to turn that into $15 (if MP closes at or above $110 on expiry). Notably, this spread buyer would realize the full profit potential only if MP climbs another 16.8 points from the trade price within four days.

The swift move from 90.13 to 93.70 following the trade's initiation highlights the rapid momentum—and shows why even short-term call spreads can post substantial gains in volatile, upward-trending stocks. With the spread up 30.7% almost immediately, the trade looks well-timed so far, and the magnitude of contracts (5,554) reflects meaningful conviction or a sophisticated institutional hedge.

Technicals: MP's Uptrend Is Outpacing the Market

The underlying strength in MP isn't limited to the options market. Consider the technical backdrop:

• Current price: $93.70 (up 15.36, or 19.61% in a single session)
• Opened with a 10.8% jump and tacked on another 8.0% during the day
• Now 31.6% above its 20-day average, and 171.4% above its 250-day
• Price is breaking above expected daily resistance of 82.89
• 1-year performance: +438.1% vs SPY’s +16.2%

All major moving averages (20, 50, 250 days) are in a confirmed uptrend. MP has handily outperformed the SPY index fund not just over the last year, but over 3-month and 2-week periods too, with especially dramatic gains in the past six months and year-to-date.

It's rare for a stock to remain this extended from all its averages while continuing to outpace the broad market by this much—typically a sign that momentum traders may stay active.

Option Skew Indicator Confirms Bullish Sentiment

Further supporting the case for bullish bets: MP's 30-day implied volatility skew sits in the 88th percentile (near its most bullish reading for the year). This signals that the options market is pricing in a strong upside bias compared to historical norms.

Market Chameleon’s proprietary skew tool interprets such a reading as evidence of increased trader demand for calls, either as speculation or for risk-management, and can often coincide with breakout moves. For those who want to research more spreads or other multi-leg strategies, you can use the multi-leg option trades screener.

Key Takeaway: High-Conviction Bullish Bet in a Momentum-Driven Stock

To summarize: This large, high-conviction call spread not only quickly paid off due to MP's volatile uptrend, but also reflects ongoing bullish positioning visible in both the technical and options markets. While hitting max profit by Friday would require another 17.4% surge in just a few days—a tall order, given recent gains—the options and price trends both support the notion that traders expect further fireworks.

As always, while historical outperformance and a bullish options skew provide support for this momentum trade, moves of this magnitude don’t come without risk. If MP falters, that hefty options outlay can shrink just as fast. For now, though, this trade provides a compelling window into how traders are positioning for continued strength—and why many are still watching MP’s next move closely.

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Disclosure: This article was generated with the assistance of AI