Trade Alert: Betting On Another Bottleneck
Time for tungsten to shine.
Betting On Another Critical Mineral Bottleneck
Using options to finance upside on a tungsten supplier outside China
Most of the attention around “critical minerals” has gone to the usual suspects: copper for grids and data centers, uranium for reactors, lithium and nickel for batteries. Today’s trade is about a less talked-about metal that lives in the same family of bottlenecks, but sits much closer to the sharp end of defense and industrial policy.
A Less Obvious Critical Mineral Bottleneck
It’s one of the hardest elements on the periodic table, and it shows up in unglamorous places that matter a lot in a rearming world: armor-piercing munitions, missile components, cutting tools, and other hardware that doesn’t work if you swap real atoms for software abstractions. China dominates the global supply of this metal, and recent export restrictions have been a reminder of how dependent Western countries are on imports they don’t fully control.
Production Outside Of China
Our stock today is a western producer that’s trying to change that. It’s building out a multi-jurisdiction platform across Europe, Asia, and North America, with one large mine ramping and another project in the U.S. in earlier stages. The pitch is simple: if Washington and its allies are serious about de-risking supply chains for this metal the way they’ve talked about doing for rare earths and gallium, someone outside China has to actually produce the stuff at scale. This company wants to be that someone.
A Market Watchers Name
From our side, the name first showed up in our Market Watchers X list as a thematically interesting way to play the “real economy” side of AI and reindustrialization. More recently, it passed a tighter technical screen too: RSI in a healthy 40–70 range and a strong Chartmill setup score, which is our way of trying to avoid true falling knives while still getting paid for volatility. The options chain is illiquid enough that you wouldn’t want to lean on midpoints blindly, but rich enough to let us do what we usually like to do: harvest near-term put and call premium to help finance a longer-dated upside view.
So today’s trade is a hybrid combo on that stock. We’re using near-term options to create a defined put floor, selling some premium around that floor, and using the proceeds to help pay for a longer-dated call that benefits if this turns into the kind of non-China critical-minerals supplier policymakers say they want. As usual, we used Black–Scholes on each leg to estimate a fair value for the structure; the max net debit we’re using in the alert is at a discount to that, so we’re not taking the broker’s midpoint on faith.
Full details below.
Today’s Market Watchers Trade
Critical minerals / defense-supply-chain theme
