Full Truck Alliance Plunges 5.7% – What’s Behind the Sudden Sell-Off?

Summary
• Full Truck Alliance (YMM) slumps 5.7% to $11.155, hitting a 52-week low of $6.66
• Institutional investors like ANTIPODES Partners and SoftBank boost holdings, but market sentiment turns bearish
• Analysts cut price targets, with JPMorgan downgrading to 'neutral' and Citigroup lowering its target to $16.00

Full Truck Alliance’s shares have plunged to a 12-month low amid a surge in institutional buying and conflicting analyst ratings. The stock’s sharp intraday drop of $0.98 has traders scrambling to decipher whether this is a short-term correction or a sign of deeper sector woes. With the trucking industry facing regulatory headwinds, tariff uncertainty, and rising cargo theft incidents, YMM’s technicals and options chain are flashing red flags for risk-on investors.

Trucking Sector Turmoil and Analyst Divergence Spark Flight to Safety
The sell-off in Full Truck Alliance follows a confluence of sector-specific and macroeconomic pressures. Recent news of Trump-era tariffs on Mexican and Canadian imports, coupled with a 35% tariff on Canadian goods starting August 1, has created uncertainty in cross-border freight demand. Additionally, the sector is grappling with a surge in cargo theft incidents and regulatory crackdowns on non-domiciled CDL holders, which could strain capacity. Analysts have also turned cautious: JPMorgan downgraded YMM to 'neutral' with a slashed price target of $10.00, while Citigroup cut its target to $16.00 despite maintaining a 'buy' rating. This divergence has sown doubt among traders, triggering profit-taking and margin calls.

Trucking Sector Volatility Outpaces UPS’s Resilience
While YMM cratered, sector leader United Parcel Service (UPS) held steady with a 0.53% intraday gain. UPS’s ability to navigate regulatory and tariff challenges—such as its recent $43 million savings from switching air cargo to UPS—contrasts sharply with YMM’s struggles. The broader trucking industry is also facing layoffs, with companies like Ruan Transport cutting 144 jobs in Arizona and Daimler Truck planning 2,000 temporary layoffs. This divergence highlights YMM’s vulnerability as a mid-cap player in a sector marked by consolidation and margin compression.

Bearish Positioning and Leverage Ratios Highlight High-Risk Opportunities
• 200-day MA: 11.25 (below current price)
• RSI: 46.48 (neutral zone)
• MACD: -0.0825 (bearish divergence)
• Bollinger Bands: 11.46–13.04 (price near lower band)

Technical indicators suggest a continuation of the short-term bearish trend, with the 200-day moving average acting as a critical support level. The RSI hovering in neutral territory indicates a lack of conviction in either direction, while the MACD histogram’s negative value reinforces bearish momentum. The Invesco Golden Dragon China ETF (PGJ, -1.45%) could amplify YMM’s volatility due to its exposure to Chinese equities, which face regulatory and trade pressures.

Option 1: YMM20250815C12.5 (Call Option)
• Code: YMM20250815C12.5
• Type: Call
• Strike: $12.50
• Expiration: 2025-08-15
• IV: 49.12% (high volatility)
• Leverage Ratio: 74.83% (high)
• Delta: 0.2078 (moderate sensitivity)
• Theta: -0.0123 (moderate time decay)
• Gamma: 0.2115 (high sensitivity to price movement)
• Turnover: 20,474 (liquid)
• Implied Volatility: High volatility suggests potential for large swings; Leverage Ratio: High amplifies gains/losses; Delta: Moderate means partial price sensitivity; Theta: Moderate time decay; Gamma: High means delta changes rapidly with price movement.
This option offers aggressive upside if YMM rebounds above $12.50 before August 15. The high gamma ensures delta increases rapidly if the stock rallies, while the moderate theta balances time decay risks. Projected payoff in a 5% downside scenario (to $10.59): $0 (no intrinsic value).

Option 2: YMM20250919P12.5 (Put Option)
• Code: YMM20250919P12.5
• Type: Put
• Strike: $12.50
• Expiration: 2025-09-19
• IV: 52.97% (high)
• Leverage Ratio: 6.60% (low)
• Delta: -0.6481 (high sensitivity)
• Theta: -0.0017 (low time decay)
• Gamma: 0.1576 (moderate sensitivity)
• Turnover: 8,990 (liquid)
• Implied Volatility: High volatility suggests potential for large swings; Leverage Ratio: Low limits amplification; Delta: High means strong price sensitivity; Theta: Low time decay; Gamma: Moderate means delta changes gradually.
This put option is ideal for a bearish bet, with a high delta ensuring significant payoff if YMM drops further. Projected payoff in a 5% downside scenario (to $10.59): $1.91 (K - ST = 12.50 - 10.59).

Trading Hook: If $11.155 breaks below $10.87 (intraday low), YMM20250919P12.5 offers short-side potential. Aggressive bulls may consider YMM20250815C12.5 if a $12.50 rebound materializes.

Backtest Full Truck Alliance Stock Performance
After a -6% intraday plunge, YMM has historically shown positive short-to-medium-term performance. The 3-Day win rate is 47.56%, the 10-Day win rate is 51.13%, and the 30-Day win rate is 55.83%, indicating a higher probability of positive returns in the immediate aftermath of such a plunge. The maximum return during the backtest period was 7.01%, suggesting that while there is some volatility, YMM can recover and even exceed its pre-plunge levels.

Trucking Sector Turmoil: What to Watch Before the Next Move
The sell-off in Full Truck Alliance reflects broader sector headwinds, including regulatory crackdowns, tariff uncertainty, and rising cargo theft incidents. While institutional investors like ANTIPODES and SoftBank are accumulating shares, the stock’s technicals and options chain suggest continued volatility. Traders should monitor the 200-day MA at $11.25 and the $10.87 intraday low for directional clues. Sector leader UPS’s resilience (+0.53%) offers a contrast, but YMM’s leverage to Chinese equity exposure via PGJ makes it a high-risk play. Action Insight: Short-term traders should watch for a breakdown below $10.87, while longer-term investors may consider the $12.50 call option if a rebound aligns with sector recovery.