HYMC Plunges 10.8% Amid Silver Discovery Hype and Market Profit-Taking: What’s Fueling the Selloff?

Summary
• Hycroft Mining (HYMC) surges 52% weekly on silver discovery optimism, then gaps down 10.8% intraday
• Gold and silver hit record highs before sharp profit-taking drags HYMC to $21.20
• Options chain shows heavy put buying at $16–$25 strikes as volatility spikes to 150%

Hycroft Mining’s (HYMC) volatile December 29 session reflects a collision of bullish exploration news and bearish market sentiment. After a 52% weekly rally fueled by high-grade silver discoveries, the stock opened 9.1% lower and traded in a $21.20–$23.08 range. This sharp reversal coincided with gold and silver’s post-record selloff, as traders booked profits ahead of year-end. With implied volatility surging and put options dominating the options chain, the question is whether this is a buying opportunity or a warning sign.

Silver Optimism Clashes with Commodity Profit-Taking
HYMC’s 10.8% intraday drop stems from a perfect storm of factors. While the company’s Vortex Silver System discovery initially drove a 52% weekly rally, the broader precious metals market turned bearish as gold and silver retreated from record highs. This profit-taking was amplified by thin year-end liquidity and a 150%+ implied volatility spike in HYMC options. Additionally, Eric Sprott’s $2.4M insider purchase contrasted with Marni Wieshofer’s 5.2% stake reduction, signaling mixed institutional sentiment. The stock’s 52-week high of $29.80 now feels distant as technical indicators show overbought conditions (RSI: 85.8) and a bearish MACD crossover.

Gold Sector Slumps as Newmont (NEM) Leads Downside
HYMC’s selloff mirrors the broader gold sector’s weakness, with Newmont (NEM) down 5.5% and Agnico Eagle (AEM) off 6.2%. The sector’s 4.3% average decline reflects profit-taking after gold hit $4,530/oz. While HYMC’s 10.8% drop outpaces peers, its beta of 2.71 amplifies volatility. Silver’s 11% intraday plunge further pressured HYMC, as the stock’s performance is tied to both gold and silver prices. The sector’s technical breakdown—RSI below 50 for NEM and AEM—suggests further near-term weakness.

Options and ETFs for Navigating HYMC’s Volatility
• 200-day average: $5.83 (far below current price)
• RSI: 85.8 (overbought)
• MACD: 3.78 (bullish) vs. signal line 2.43
• Bollinger Bands: $4.35–$26.05 (wide range)

HYMC’s technicals suggest a volatile setup. The stock is overbought (RSI: 85.8) but remains above key support levels. A break below $21.20 could trigger a test of the 200-day average at $5.83, though short-term momentum indicators (MACD: 3.78) hint at potential bounce. For options, focus on high-leverage puts with strong gamma and theta characteristics:

• HYMC20260116P22
- Put option, strike $22, exp. 1/16/2026
- IV: 148.31% (high volatility)
- Leverage: 10.27% (high reward potential)
- Delta: -0.35 (moderate sensitivity)
- Theta: -0.0549 (rapid time decay)
- Gamma: 0.0464 (responsive to price swings)
- Turnover: 452,779 (liquid)
- Payoff (5% down): $1.17/share (max profit if HYMC drops to $21.19)
- Why it stands out: High leverage and gamma make this put ideal for a 5% downside scenario, with strong liquidity to enter/exits.

• HYMC20260116P20
- Put option, strike $20, exp. 1/16/2026
- IV: 148.95% (high volatility)
- Leverage: 16.87% (high reward potential)
- Delta: -0.25 (moderate sensitivity)
- Theta: -0.0513 (rapid time decay)
- Gamma: 0.0398 (responsive to price swings)
- Turnover: 143,339 (liquid)
- Payoff (5% down): $1.12/share (max profit if HYMC drops to $21.19)
- Why it stands out: Slightly out-of-the-money but offers higher leverage and liquidity, ideal for a bearish short-term bet.

Action Alert: Aggressive bears should consider HYMC20260116P22 into a breakdown below $22.00. If HYMC stabilizes above $23.00, consider a short-term long position with HYMC20260116C24 (delta: 0.51) for a bounce trade.

Backtest Hycroft Mining Stock Performance
The backtest of HYMC's performance after an intraday plunge of -11% from 2022 to now shows favorable results, with the ETF experiencing a maximum return of 13.08% over a 30-day period. The 3-Day win rate is 47.84%, the 10-Day win rate is 48.63%, and the 30-Day win rate is 52.16%, indicating a higher probability of positive returns in the short term. The average returns over 3, 10, and 30 days are 1.46%, 4.00%, and 8.70%, respectively.

HYMC at Crossroads: Volatility or Value?
HYMC’s 10.8% selloff reflects a market grappling with overbought conditions and sector-wide profit-taking. While the stock’s 52% weekly rally on silver optimism is impressive, its current technical profile—RSI at 85.8 and a bearish MACD crossover—suggests caution. The options chain’s heavy put buying (16 contracts at $14–$25 strikes) indicates significant bearish positioning. For now, watch the $21.20 support level and Newmont’s (NEM, -5.5%) sector performance. If HYMC breaks below $20.00, the HYMC20260116P20 put offers a high-leverage play. Conversely, a rebound above $23.00 could reignite bullish momentum.