LAC Plummets 12.8% Amid Trump Equity Stake Talks—Is This a Buying Opportunity?

Summary
• Lithium Americas (LAC) plunges 12.8% to $6.425, erasing a $1.05 intraday gain
• Trump administration seeks up to 10% equity stake in Thacker Pass project
• $2.26B DOE loan renegotiation sparks volatility
• RSI at 91.79 signals overbought conditions despite sharp selloff

Lithium Americas (LAC) is in freefall after the Trump administration’s surprise equity stake proposal for the Thacker Pass project. The stock, which hit a 52-week high of $7.53 earlier in the session, now trades near its intraday low of $6.26. With General Motors and the DOE in negotiations over loan terms, investors are scrambling to assess the implications of government involvement in a critical EV supply chain asset.

Government Equity Stake Sparks Volatility
The Trump administration’s proposed 10% equity stake in Lithium Americas has triggered a dramatic selloff, despite earlier gains. The move, tied to renegotiating the $2.26 billion DOE loan for Thacker Pass, introduces regulatory uncertainty and potential dilution for existing shareholders. While the government’s involvement signals strategic importance for U.S. lithium independence, the lack of clarity on terms—such as repayment adjustments and offtake guarantees—has spooked investors. General Motors’ 38% stake and 20-year offtake agreement remain central to the project’s economics, but the administration’s push for a cash buffer through equity dilution has created short-term headwinds.

Lithium Sector Mixed as EV Supply Chain Uncertainty Lingers
The lithium sector remains fragmented, with Albemarle (ALB) bucking the trend by rising 4.05% on improved refining margins. While LAC’s Thacker Pass project is positioned to dominate North American supply, sector-wide concerns persist over oversupply and Chinese competition. The administration’s equity stake in LAC mirrors its recent investments in MP Materials and Intel, signaling a broader push for strategic control over critical minerals. However, LAC’s Canadian domicile and cross-listing on the NYSE add jurisdictional complexity, differentiating it from U.S.-based peers.

Options Playbook: Capitalizing on Volatility and Technicals
• RSI: 91.79 (overbought)
• MACD: 0.602 (bullish), Signal Line: 0.217
• 200D MA: $2.96 (far below current price)
• Bollinger Bands: $1.04–$5.71 (wide range)

LAC’s technicals suggest a volatile but structurally bullish setup. The RSI at 91.79 indicates overbought conditions, but the stock’s sharp decline from $7.53 to $6.26 suggests exhaustion of short-term sellers. The MACD remains positive, and the 200D MA is a distant $2.96, reinforcing long-term conviction. For options traders, the key is leveraging high implied volatility (IV) and gamma to capitalize on potential rebounds.

Top Options Picks:
• LAC20260116P5.5 (Put, $5.5 strike, Jan 16 2026):
- IV: 115.32% (high)
- Delta: -0.28 (moderate bearish exposure)
- Theta: -0.005 (slow time decay)
- Gamma: 0.082 (responsive to price swings)
- Turnover: $35,259 (liquid)
- Leverage: 6.10% (high)
- Payoff (5% downside): $0.06 per share
- Why: This put offers asymmetric upside if LAC breaks below $5.50, with high gamma amplifying gains in a volatile environment.

• LAC20260116C5.5 (Call, $5.5 strike, Jan 16 2026):
- IV: 116.93% (high)
- Delta: 0.72 (strong bullish bias)
- Theta: -0.007 (moderate time decay)
- Gamma: 0.081 (price-sensitive)
- Turnover: $264,502 (high liquidity)
- Leverage: 3.14% (moderate)
- Payoff (5% downside): $0.00 (no intrinsic value)
- Why: Ideal for aggressive bulls expecting a rebound above $5.50, with high IV and liquidity ensuring trade execution.

Action: Aggressive bulls may consider LAC20260116C5.5 into a bounce above $5.50, while bears should eye LAC20260116P5.5 if support at $5.50 breaks.

Backtest Lithium Stock Performance
Below is an interactive back-test panel summarising the “-13 % intraday plunge rebound” strategy on Lithium Americas (ticker LAC) from 2022-01-01 to 2025-09-26. Key items to note:• Signals: buy at that session’s close whenever the day’s low falls ≥ 13 % below the previous close. • Risk control parameters (auto-filled): 8 % stop-loss, 20 % take-profit, maximum 20-day holding period – typical for a short-term rebound model. • Result highlights: cumulative return ≈ 15 %, annualised ≈ 6.7 %, max draw-down ≈ 24 %. Feel free to adjust the risk controls or sample period and let me know if you’d like to rerun.Open the panel to explore full statistics, trade-by-trade details and equity-curve visuals.

LAC at Crossroads: Strategic Buy or Sell-Off Opportunity?
LAC’s sharp selloff reflects short-term uncertainty around the Trump administration’s equity stake, but the long-term fundamentals for Thacker Pass remain intact. Investors should monitor the DOE loan renegotiation and GM’s offtake commitments, which could stabilize the stock. The lithium sector, led by Albemarle (ALB) at +4.05%, highlights the importance of refining margins and geopolitical positioning. For LAC, a sustained close above $6.50 would signal a bullish reversal, while a breakdown below $5.50 could trigger deeper selling. Watch for $5.50 support and $7.50 resistance—key levels that will define the next phase of this strategic play.