TMC the Metals Plummets 9% Amid Regulatory Uncertainty and Profit-Taking: What's Next for the Deep-Sea Miner?

Summary
• TMC the Metals (TMC) plunges 8.96% to $7.11, erasing $0.70 from its value in under 4 hours
• Intraday range widens to $7.06–$7.80 as $7.50 support level crumbles
• $85.2M Korea Zinc investment and NOAA compliance fail to offset profit-taking frenzy

The Metals Company’s stock has imploded on October 22, 2025, as a confluence of regulatory uncertainty, profit-taking, and macroeconomic headwinds collide. Despite recent progress in securing U.S. exploration permits and a strategic equity infusion, TMC’s 9% selloff reflects market skepticism over its deep-sea mining timeline and scalability. With intraday volatility spiking and options chains flashing bearish signals, the question now is whether this is a buying opportunity or a warning shot.

Regulatory Hurdles and Profit-Taking Trigger Sharp Selloff
TMC’s collapse stems from a perfect storm of factors. While NOAA’s August 11 compliance notice for exploration licenses initially buoyed optimism, the stock’s 8.96% drop reflects investor unease over the International Seabed Authority’s delayed mining code and environmental pushback. Compounding this, the $85.2M Korea Zinc investment—despite securing 5% ownership—failed to offset profit-taking after TMC’s 800% YTD surge. The stock’s 52-week high of $11.35 now feels distant as short-term traders exit ahead of the October 31 expiry, with put options at the $7.50 strike seeing 194 contracts traded. Macroeconomic headwinds, including China’s iron ore price cuts and BHP’s mixed performance (-0.59%), further pressured industrial metals sentiment.

Industrial Metals Sector Volatile as BHP Drives Mixed Momentum
The industrial metals sector remains a battleground of diverging narratives. While BHP Group (BHP) dipped 0.59% amid iron ore demand concerns, TMC’s 9% plunge highlights deep-sea mining’s unique risks. Unlike traditional miners like Rio Tinto or Anglo American, TMC’s exposure to regulatory delays, environmental scrutiny, and unproven commercial viability amplifies its volatility. The sector’s mixed performance underscores the challenge of balancing near-term macroeconomic pressures with long-term decarbonization bets.

Bearish Options and ETFs Highlight Short-Term Risk-On Playbook
• 200-day MA: $4.26 (well below current price)
• 30D MA: $7.26 (resistance ahead of $7.50)
• RSI: 55.23 (neutral but trending lower)
• MACD: 0.70 (bearish crossover with signal line at 0.85)
• Bollinger Bands: $5.24–$10.94 (current price near lower band)

TMC’s technicals paint a bearish near-term picture. The stock is trading below its 200-day MA and testing the lower Bollinger Band, suggesting oversold conditions. With RSI stabilizing at 55 and MACD signaling a bearish crossover, short-term traders should focus on key levels: $7.00 (psychological support) and $6.50 (next critical threshold). The 30D MA at $7.26 may act as a temporary floor, but a breakdown below $7.00 would likely trigger further selloff.

Top Options Picks
• TMC20251031P7.5
- Put Option, Strike: $7.50, Expiry: 2025-10-31
- IV: 113.04% (elevated volatility)
- Delta: -0.596 (high sensitivity to price drops)
- Theta: -0.0056 (moderate time decay)
- Gamma: 0.294 (strong gamma for leveraged plays)
- Turnover: $11,875 (high liquidity)
- LVR: 8.79% (moderate leverage)
- Payoff at 5% downside (ST = $6.75): $0.75 per contract
- This put option offers a compelling risk-reward profile. Its high delta and gamma make it ideal for a sharp selloff, while elevated IV ensures premium retention. With 194 contracts traded, liquidity is robust, and the 10-day expiry aligns with near-term volatility.

• TMC20251107P7.5
- Put Option, Strike: $7.50, Expiry: 2025-11-07
- IV: 92.42% (reasonable volatility)
- Delta: -0.584 (strong bearish exposure)
- Theta: -0.0045 (minimal time decay)
- Gamma: 0.278 (responsive to price swings)
- Turnover: $2,344 (adequate liquidity)
- LVR: 8.48% (moderate leverage)
- Payoff at 5% downside (ST = $6.75): $0.75 per contract
- This longer-dated put offers a safer play for a sustained selloff. Its lower theta and IV make it less sensitive to time decay, while the 7.50 strike price provides a buffer against a rebound. Ideal for investors expecting continued pressure into early November.

Trading Setup: Aggressive bears should prioritize TMC20251031P7.5 for a short-term bet on the $7.00 breakdown. For a more conservative approach, TMC20251107P7.5 offers flexibility if the selloff extends. Avoid call options like TMC20251031C7.5, which face a 48.75% price drop and high theta decay.

Backtest TMC the metals Stock Performance
Below is an interactive report that summarises the strategy back-test you requested. (The chart and detailed trade list can be explored directly in the module.)Key take-aways:• The strategy captured 35 plunge events between 2022-01-03 and 2025-10-22. • Total cumulative return: –13.6 %, despite an annualised return of 13.9 % — indicating gains on some trades but overall erosion, likely due to large intermittent losses. • Maximum draw-down reached 80 %, underscoring high tail-risk inherent in deep-dip buying without tight risk limits. • Average trade made +1.9 %, but winners (+31.8 % on average) were outweighed by frequent –13.6 % losing trades. • The low Sharpe ratio (≈0.23) signals poor risk-adjusted performance.Suggestions for improvement:1. Tighten entry filter – consider requiring additional confirmation (e.g., oversold RSI or volume spike) instead of relying solely on the –9 % drop. 2. Review exit logic – a trailing stop or earlier time-based exit (e.g., 5–10 days) could curb large draw-downs. 3. Position sizing – employ smaller allocations per event or diversify across a basket of similar-beta stocks to smooth the equity curve. 4. Stress-test alternative thresholds (e.g., –12 %, –15 %) and different TP/SL pairs to locate a more favourable risk-return pocket.Feel free to explore the interactive panel above and let me know if you’d like deeper drill-downs, parameter tweaks, or additional robustness tests.

TMC’s 9% Drop: A Buying Opportunity or a Warning Shot?
TMC’s 9% selloff reflects a critical inflection point. While regulatory progress and Korea Zinc’s investment remain positives, the stock’s technical breakdown and bearish options flow suggest near-term vulnerability. Investors should monitor the $7.00 support level and the International Seabed Authority’s March 2026 roadmap. For context, sector leader BHP’s -0.59% decline underscores broader industrial metals fragility. Action Plan: Short-term traders should target TMC20251031P7.5 for a $7.00 breakdown, while long-term bulls may consider averaging down at $6.50 if fundamentals hold. Watch for $7.00 support or regulatory clarity—either could trigger a reversal.