Loop Industries Soars 22.24%, What’s Fueling This Volatile Bull Run?

Summary
• Loop Industries (LOOP) surges 22.24% intraday to $1.6625, marking a sharp rebound from its 200-day moving average of $1.2705
• Insider purchases totaling $915,499 in premarket trading signal strategic confidence
• Intraday range of $1.51–$1.79 reflects heightened volatility amid sector-wide EPR policy tailwinds

Loop Industries has ignited a dramatic 22.24% rally in after-hours trading, driven by a combination of insider buying, regulatory optimism for plastics recycling, and technical momentum. With the stock trading above its 52-week high of $2.29, the move underscores growing conviction in the company’s circular materials strategy amid global policy shifts. Investors are now weighing whether this surge represents a sustainable inflection point or a short-term volatility spike.

Insider Confidence and EPR Policy Momentum Drive Sharp Rally
Loop Industries’ explosive 22.24% surge is directly tied to a $915,499 insider purchase disclosed premarket, with CEO Daniel Solomita and other executives acquiring shares at a premium. This activity, coupled with the company’s alignment with UK and EU Extended Producer Responsibility (EPR) schemes, has amplified sector momentum. The stock’s intraday range of $1.51–$1.79 reflects aggressive buying pressure, with technical indicators like RSI (61.27) and MACD (-0.0247) hinting at potential overbought conditions and bullish crossover signals.

Pollution & Waste Management Sector Gains Policy Tailwinds
While Loop Industries’ 22.24% rally outpaces sector benchmarks, the broader Pollution & Waste Management sector is benefiting from UK/EU EPR policy acceleration. Sector leader Waste Management (WM) dipped -0.92% intraday, highlighting divergent investor sentiment between traditional waste operators and innovation-driven names like LOOP. Regulatory focus on channeling EPR revenues into developing-world waste systems has positioned recycling technologies as a key thematic play.

Leverage Loop’s Volatility with Gamma-Driven Options and ETF Positioning
• 200-day moving average: $1.2705 (well below current price)
• RSI: 61.27 (neutral to overbought)
• MACD: -0.0247 (bullish crossover potential)
• Bollinger Bands: $1.0953–$1.4142 (current price above upper band)

Loop Industries’ technicals suggest a continuation of bullish momentum, with RSI near overbought territory and MACD hinting at a potential crossover. The stock’s 13.28% turnover rate and 22.24% intraday surge indicate strong short-term liquidity. Two key options stand out for aggressive positioning:

• LOOP20251017C1.5 (Call, $1.5 strike, 2025-10-17):
- IV: 131.83% (elevated volatility)
- Delta: 0.698 (moderate price sensitivity)
- Theta: -0.002610 (moderate time decay)
- Gamma: 0.330 (high sensitivity to price swings)
- Turnover: $2,328 (liquid)
- Leverage: 3.38%
This call option offers a leveraged bet on LOOP’s near-term continuation above $1.5. A 5% price rise to $1.7456 would generate a 133% return on the contract, leveraging high gamma and moderate theta decay.

• LOOP20251017P1.5 (Put, $1.5 strike, 2025-10-17):
- IV: 115.78% (extreme volatility)
- Delta: -0.305 (low price sensitivity)
- Theta: -0.001570 (moderate time decay)
- Gamma: 0.3776 (moderate sensitivity)
- Turnover: $250 (less liquid)
- Leverage: 6.76%
The put option provides a hedge against a pullback, though its low delta suggests limited upside in a bullish scenario.

Aggressive bulls should prioritize LOOP20251017C1.5 into a break above $1.75. The options’ high gamma and elevated IV position them to capitalize on continued momentum.

Backtest Loop Industries Stock Performance
The strategy that involves a 22% intraday surge has shown a significant return of 81.82% over the backtest period, outperforming the benchmark return of 88.74% by 6.92%. Despite this, the strategy's CAGR is lower than the benchmark's at 12.77% versus 15.74%, indicating a lower long-term growth rate. The strategy's maximum drawdown is 0.00%, and its Sharpe ratio is 0.61, suggesting a moderate risk-adjusted return and minimal downside risk.

Act Now: Loop’s Rally May Signal Sector Inflection Point
Loop Industries’ 22.24% intraday surge reflects a confluence of insider confidence, sector policy momentum, and technical strength. With RSI near overbought levels and MACD hinting at a potential crossover, the stock remains in a high-risk, high-reward phase. Investors should monitor the 200-day moving average at $1.27 and the $1.50 support/resistance level. Meanwhile, sector leader Waste Management’s -0.92% decline highlights the divergence between traditional and innovation-driven waste management models. Act decisively on LOOP20251017C1.5 if the $1.75 level holds, as the 13.28% turnover rate and sector tailwinds suggest this rally could be just the beginning.