MP Materials Corp. MP shares traded higher on Wednesday after China announced the restriction of germanium and gallium, which has lifted rare earth metals companies outside of China.
On CNBC’s "Options Action," Kevin Kelly of Kelly Intelligence said there were 4x more calls than puts on MP Materials on Wednesday.
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There were buyers of 3,839 of the December 30-calls at an average price of $1.75 per contract, Kelly mentioned.
Traders expect MP Materials shares to surge at least 30% by December expiration.
According to a Wall Street Journal report, China set export restrictions on gallium and germanium, which are two minerals that are used for semiconductor production, solar cells and missiles. China also put restrictions on more than 35 other related metals and materials. The report indicates the restrictions will go into effect on Aug. 1.
Price Action: MP Materials shares rose 6% to close at $24.55 on Wednesday, and added 2.7% in today’s pre-market trading session.
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