MP Materials Corp. (MP) Call Options Explode as Pentagon Becomes Largest Shareholder

Upside option positions are delivering massive profits in MP Materials Corp. (MP).

On May 28, Market Rebellion’s Unusual Activity Service identified the purchase of 12,000 July $25 call options bought mostly for $0.30 to $0.61 per contract, with MP shares trading at $18.68-$19.54, significantly exceeding the strike’s previous open interest of 1,715 contracts.

The timing proved particularly fortuitous, coming amid escalating US-China trade tensions over rare earth materials that would dominate headlines throughout June 2025.

Those July $25 calls have traded as high as $19.95 today with the stock at $44.95, delivering impressive returns of approximately 3,172.13% to 6,550.00% from the initial entry price range of $0.30-$0.61. Meanwhile, MP shares have gained approximately 140.59% from their initial trading level around $18.68, demonstrating how options can deliver significantly amplified returns compared to simply owning the underlying stock.

This performance illustrates the power of options leverage when the directional thesis proves correct, though it’s important to note that this same leverage can work against traders when market moves go in the opposite direction.

The explosive move in MP comes as MP Materials Corp., America’s only fully integrated rare earth producer, benefits from a groundbreaking Pentagon investment that solidified the company’s strategic importance to national security. On July 10, 2025, the Department of Defense announced it would purchase $400 million of newly created preferred stock in MP Materials, making the Pentagon the company’s largest shareholder with a 15% stake through convertible preferred shares and warrants.

Key developments following the options activity included the landmark Pentagon investment announcement on July 10, 2025, where the Department of Defense agreed to purchase $400 million of preferred stock, making it MP Materials’ largest shareholder. The investment, which includes convertible preferred shares and warrants convertible at $30.03 per share for 10 years, represents a total 15% ownership stake and validates MP’s critical role in America’s rare earth supply chain security.

The Pentagon deal came amid escalating US-China trade tensions, with China’s Ministry of Commerce imposing export controls on specific medium and heavy rare earth materials citing national security concerns. This created significant supply chain disruptions for US manufacturers, highlighting the critical importance of domestic rare earth production capabilities that MP Materials uniquely provides.

MP Materials Corp. specializes in rare earth mining and processing, operating America’s only scaled rare earth supply chain from their Mountain Pass, California facility. MP Materials is America’s only fully integrated rare earth producer with capabilities spanning the entire supply chain—from mining and processing to advanced metallization and magnet manufacturing. The company has been aggressively expanding its domestic production capacity, with commercial magnet production expected to start at their Fort Worth, Texas facility by the end of 2025.

The company’s first quarter 2025 results, reported after the options activity, showed strong operational performance with revenue increasing 25% year over year to $60.8 million, record NdPr production of 563 metric tons representing a 36% sequential increase, and NdPr sales volumes more than doubling year over year to 464 metric tons.

MP closed today at $45.11, down 0.27% on the session.