Ramaco Resources A (METC) Plummets 12% Amid Rare Earth Sector Volatility: What’s Fueling the Selloff?

Summary
• METC’s intraday price plummets 11.99% to $17.62, hitting a 52-week low of $6.30
• $300 million convertible notes offering and hedging transactions dominate recent news
• Rare earth sector faces headwinds as China suspends export curbs and Trump downplays supply chain risks

Ramaco Resources A (METC) is trading at a 12% intraday loss amid a broader selloff in the rare earth sector. The stock’s sharp decline follows a $300 million convertible notes offering and a surge in short-term volatility, with implied volatility ratios on options hitting 100%+. The move coincides with China’s recent easing of export restrictions and Trump’s comments downplaying U.S. reliance on rare earths, sparking investor caution in the space.

Convertible Notes Offering and Sector-Wide Jitters Trigger Selloff
The selloff in METC is driven by two key factors: the company’s $300 million convertible notes offering, which has raised concerns about dilution, and broader sector weakness linked to geopolitical developments. China’s suspension of rare earth export curbs and Trump’s assertion that the U.S. no longer faces a 'China rare-earth threat' have dampened near-term demand optimism. Additionally, recent news of MP Materials’ 7.63% intraday gain highlights a sector divide, with investors shifting to more politically insulated plays. METC’s recent hedging transactions and dual-class share structure have also fueled skepticism about its ability to execute its Brook Mine rare earth project profitably.

Rare Earth Sector Mixed as MP Materials Outperforms
While METC tumbles, MP Materials (MP) surges 7.63%, reflecting divergent investor sentiment within the sector. MP’s recent government-backed vertical integration and $500 million Apple partnership have bolstered confidence in its rare earth magnet supply chain. In contrast, METC’s reliance on coal-based rare earth extraction and its recent capital-raising moves have drawn scrutiny. The sector’s volatility underscores the tension between geopolitical tailwinds and operational execution risks, with MP’s state-backed model currently outpacing peers like METC.

Bearish Options and Key Technical Levels for Short-Term Traders
• 200-day average: 18.28 (below current price)
• RSI: 19.48 (oversold)
• MACD: -4.14 (bearish divergence)
• Bollinger Bands: Price at 16.42 (lower band)

Technical indicators suggest a short-term oversold condition, but the stock’s 52-week low and sector-wide jitters point to continued downside risk. The 17.61 intraday low is now critical support; a break below this could trigger a test of the 9.55–10.51 200D support range. For options traders, two contracts stand out:

• METC20251219P18 (Put, $18 strike, 12/19 expiry):
- IV: 109.61% (high volatility)
- Leverage: 7.37% (moderate)
- Delta: -0.455 (sensitive to price drops)
- Theta: -0.0257 (moderate time decay)
- Gamma: 0.0701 (high sensitivity to price swings)
- Turnover: $10,615 (liquid)
- Payoff (5% downside): $0.39 per share (18.5% return on $18 strike)
This put option offers a high-gamma, high-IV trade for aggressive bearish bets, with liquidity to enter/exit quickly.

• METC20251219P19 (Put, $19 strike, 12/19 expiry):
- IV: 108.96% (high volatility)
- Leverage: 5.89% (moderate)
- Delta: -0.524 (strong bearish bias)
- Theta: -0.0238 (moderate time decay)
- Gamma: 0.0708 (high sensitivity)
- Turnover: $10,151 (liquid)
- Payoff (5% downside): $1.39 per share (28.3% return on $19 strike)
This contract offers a higher strike price for those expecting a sharper drop, with robust gamma to amplify gains if the stock gaps down.

Action: Aggressive short-sellers may consider the 12/19 P19 put for a 28% potential return under a 5% downside scenario. For a safer play, the P18 put offers liquidity and gamma-driven gains if the stock tests the 16.42 Bollinger Band.

Backtest Ramaco Resources A Stock Performance
Key Findings1. Sample size – 48 trading days since 2022 in which METC fell ≥ -12 % intraday. 2. Post-event drift – the median path stays modest until the fourth trading week, then turns meaningfully positive: • +10.5 % by the 23rd day (win-rate 62 %) • +14.4 % by the 30th day (win-rate 59 %) 3. Statistical signal – excess return over a same-period benchmark becomes significant from day 23 onward. 4. Practical takeaway – deep single-day plunges in METC have historically been followed by a one-month mean-reversion bounce; however, the edge is not immediate and drawdowns in the first two weeks remain possible.Assumptions & parameter notes • Event window: 30 trading days (engine default) – chosen to capture a full post-shock month. • Price series: daily close. • Risk-free benchmark: total-return S&P 500. • Event identification: days where the intraday low was at least 12 % below the prior day’s high; logic extracted automatically from daily OHLC data.Below is the interactive event-study panel. Hover over each curve or table row to inspect detailed metrics.Investment-grade interpretation • Tactical contrarian trades may exploit the verified 3-4-week rebound pattern, provided position sizing respects the initial volatility spike. • Because the edge materializes with lag, a simple “buy-next-day” rule carries notable timing risk; layering entries or using options may smooth payoff profiles. • Past patterns do not guarantee future results; monitor commodity-price sensitivity and liquidity, as both can alter METC’s behaviour in future drawdowns.

Ramaco Resources A Faces Crucial Support Test: What to Watch Now
METC’s 12% intraday drop has brought it to a critical juncture, with the 17.61 intraday low now acting as a key support level. A break below this could trigger a cascade toward the 9.55–10.51 200D support range, while a rebound above 19.34 intraday high may signal a short-covering rally. Investors should monitor the 12/19 options expiry for liquidity-driven moves and watch MP Materials’ 7.63% gain as a barometer for sector sentiment. For now, the bearish technical setup and geopolitical headwinds suggest caution, but options like the P19 put offer high-reward potential for those betting on a deeper selloff.