Trade Alert: Rare Earths

When a ~250% gain is still missing the boat.

Rare Timing On Rare Earths

Last night, I was reading this article on ZeroHedge ("The Coming Rare Earth Revolution And How To Profit"), and thinking I needed to add more exposure to Materials Products (MP 0.00%↑). We had bought calls on it last month in this Substack and taken profits a few days later:

• Calls on MP Materials (MP 5.70%↑). Bought for $1.05 on 6/13/2025; sold (half) for $3.70 on 6/18/2025. Profit: 252%.

Then I woke up to news today that MP had soared ~50% after a DoD investment in the company. I figured I'd take profits on the other half of my calls. I checked my accounts and realized that I had sold all of my calls in it last month instead of half. Damn. Nothing wrong with last month's ~250% profit, but if I still had half of those calls, I could have had a ~900% profit on them today. Hopefully, some of my subscribers took profits in that range today (update: at least one did). Maybe we'll get another bite at that apple on a pullback.

In the meantime, there are a few picks and shovels plays on rare earths that look attractive here. We’re going to be a little more conservative and aim for gains in the 100% to 200% range with these.

Pivoting To Picks & Shovels Plays On Rare Earths

Today, we’re entering bullish options trades on three picks & shovels plays on rare earths that haven’t spiked on today’s Materials Products news:

1. One U.S. metals outfit is the quiet workhorse behind many of the hottest aerospace and electrification themes. Its specialty mills melt nickel-, cobalt-, and iron-based alloys that can tolerate turbine-hot temperatures and accept neodymium-iron-boron inserts for high-power electric motors. Because defense primes and EV makers have few domestic alternatives, each incremental uptick in rare-earth magnet demand drops almost straight to this producer’s bottom line.

2. Another Midwest manufacturer refines ultra-clean bar and wire from recycled scrap and conversion chips. A Department of Energy grant is already helping it bolt a rare-earth extraction loop onto its vacuum-induction furnaces; by 2026 it could be the first U.S. recycler feeding neodymium-praseodymium oxide directly back into the magnet supply chain. That positions it as a toll-gate on any reshoring wave, regardless of which miner or end-use brand wins.

3. A third player casts near-net-shape titanium and aluminum components for every next-gen jet engine and hypersonic program you read about. Hidden inside many of those parts are proprietary soft-magnet inserts—small, high-value elements rich in rare-earth content that improve sensor precision and motor torque. Because its patents lock in sole-source status, a secular rise in U.S. magnet production would lift its margins without the cyclicality that pure miners face.

Details below.

Rare Earths Picks & Shovels Trade #1