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Strategic Rare Earths Play: Why We Are Bullish on REMX Options
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Disclaimer: The following content is for informational and educational purposes only and does not constitute financial advice, investment recommendations, or an offer to sell or a solicitation to buy any securities. Stock Region is not a registered investment advisor, broker, or dealer. Trading in financial markets, especially options, involves a high degree of risk and may not be suitable for all investors. You could lose some or all of your initial investment. Past performance is not indicative of future results. Please consult with a qualified financial advisor before making any investment decisions. The authors may hold positions in the securities mentioned.
The Hidden War For Technological Supremacy
You know that feeling when you’re watching a chess match, and suddenly realize one player has been setting up a checkmate for twenty moves while the other was just trying to capture pawns? That is exactly what is happening in the global commodities market right now. While the mainstream media is obsessing over the latest tech earnings or interest rate hike whispers, a much more critical battle is being fought in the dirt. Literally.
We are talking about Rare Earth Elements (REEs). These are the vitamins of modern industry. Without them, your iPhone is a brick, your EV is a statue, and modern defense systems are useless.
At Stock Region, we pride ourselves on looking where others aren’t. We discover the supply chain bottlenecks that make the hype possible. On February 13, 2026, at 10:41 AM, our proprietary algorithms and analyst team flagged a setup that was too good to ignore.
This newsletter breaks down exactly why we issued a LONG OPTION ALERT for the VanEck Rare Earth/Strategic Metals ETF ($REMX) and why we believe this specific trade structure offers a compelling risk-reward profile for the patient investor.
The Signal
For those of you who missed the alert in our exclusive Telegram channel (where members get real-time access to our best ideas), here is precisely what we sent out:
LONG OPTION ALERT
Position: Buy $REMX DEC18, 2026 $90 Call @ $17.70 limit price
Support: Below $85.63 ⬇️ (Bearish) (Hedge/Puts)
Confirmation: Above $332.16 (Bullish) ⬆️
Status: Currently up over 1.35% since the alert.
This isn’t a day trade. This is a conviction play on a macro trend that is accelerating. Let’s dive deep into the “why” behind the “what.”
Why Rare Earths? Why Now?
To understand this trade, you have to understand the geopolitical chessboard of 2026. The narrative has shifted from “energy transition” to “resource security.” Nations are no longer simply trying to go green; they are trying to secure the sovereign capability to build advanced technology.
The VanEck Rare Earth/Strategic Metals ETF ($REMX) is the benchmark for this sector. It tracks the MVIS Global Rare Earth/Strategic Metals Index, which includes companies involved in producing, refining, and recycling rare earth and strategic metals and minerals.
The Supply Crunch is Here
For years, analysts predicted a supply deficit in neodymium, praseodymium, and lithium. In 2026, those predictions are reality. The rapid scaling of EV production in Southeast Asia and the renewed push for domestic semiconductor manufacturing in the West have drained stockpiles.
We are seeing a classic “supercycle” setup. Demand is inelastic—manufacturers must have these materials regardless of price—while supply is constrained by long lead times for new mines and increasingly strict environmental regulations.
Geopolitical Friction
The trade wars of the early 2020s have evolved into resource nationalism. Major producing nations are restricting exports to keep value-added processing within their borders. This creates arbitrage opportunities and massive pricing power for the companies within the REMX basket that operate in friendly jurisdictions or have secured strategic reserves.
Technical Analysis: The Setup on $REMX
We don’t trade on feelings; we trade on data. The technical chart for REMX leading up to our February 13th alert showed a distinct coiling pattern that often precedes a breakout.
Support and Resistance Levels
The alert identified a critical support level at $85.63. This level has acted as a floor for institutional accumulation. Every time the price dips near this zone, volume spikes, indicating that big money is stepping in to buy the dip. If REMX were to break below this, it would invalidate our thesis, hence the “Bearish/Hedge” note.
On the upside, we are looking at a confirmation level of $332.16. While this seems far away from current pricing, option pricing models suggest that implied volatility is underpricing the potential for a violent move upward if key resistance levels are breached.
The “Golden Cross” Scenario
Leading up to February 2026, REMX’s moving averages began to align in a bullish formation. The 50-day moving average has been curling upward to meet the 200-day, signaling growing momentum. Momentum is a trader’s best friend, and we want to ride that wave.
The Trade Structure: Why LEAPS?
You might be asking, “Why a December 2026 call? Why not buy the stock or a shorter-term option?”
This is a crucial part of the strategy. We selected the DEC18, 2026 $90 Call. These are Long-Term Equity AnticiPation Securities (LEAPS).
1. Time is Luxury
In the volatile world of commodities, timing is the hardest variable to nail down. A catalyst might be delayed by a month due to a regulatory hurdle or a shipping strike. By buying an option that expires in December 2026, we are buying time. We don’t need the move to happen tomorrow. We just need it to happen this year.
2. Leverage with Limited Risk
Buying the stock outright is capital intensive. At the time of the alert, buying 100 shares would cost significantly more than the premium of the option ($17.70 x 100 = $1,770 per contract). This allows us to control the same amount of equity for a fraction of the cost. Our maximum risk is defined (the cost of the option), while our upside is theoretically unlimited.
3. Avoiding the “Shakeout”
Short-term options are susceptible to “gamma squeezes” and market noise. A bad CPI print or a random headline can crush a weekly option. With a LEAPS contract, we can weather the short-term storms. The minor volatility doesn’t kill our theta (time decay) as aggressively as it would with a near-term expiration.
The Components of REMX
When you buy REMX, you aren’t merely buying a ticker; you are buying a basket of the most important mining and refining companies on earth. Let’s look at the drivers within the ETF that fueled our bullish sentiment.
Lithium Giants
While lithium prices have been volatile, the long-term floor is rising. The companies in REMX that dominate lithium extraction are essentially printing money at current levels due to operational efficiencies implemented during the last down-cycle. The demand from battery gigafactories in Nevada, Germany, and China is relentless.
The Cobalt Conundrum
Cobalt remains a critical component for high-performance batteries. Ethical sourcing issues have constrained supply from traditional regions, pushing premiums higher for the ethically sourced cobalt produced by REMX constituents. This “ethics premium” is a hidden margin booster that isn’t fully priced in by Wall Street.
Heavy Rare Earths (Dysprosium & Terbium)
These are the unsung heroes of the green revolution, used in high-strength permanent magnets for wind turbines and EV motors. China’s recent export restrictions on processing technology for these specific elements have caused panic buying among Western defense contractors. REMX holds the non-Chinese miners that are the only alternative, placing them in an incredibly strong negotiating position.
Macro-Economic Tailwinds
The macro environment in early 2026 is uniquely suited for commodities.
Inflationary Pressures
While headline inflation has cooled from the peaks of 2023, sticky inflation in the services and industrial sectors remains. Hard assets like metals traditionally act as a hedge against currency debasement. As central banks navigate the “soft landing” versus “no landing” scenarios, smart money flows into tangible assets.
The Weakening Dollar
Historically, there is an inverse correlation between the US Dollar Index (DXY) and commodity prices. As the dollar weakens, commodities priced in dollars become cheaper for foreign buyers, driving up demand. Our analysis of the DXY suggests a topping pattern, which serves as a tailwind for REMX.
Infrastructure Spending
The lag effect of massive global infrastructure bills passed in 2024 and 2025 is hitting the market now. Bridges, grids, and charging networks require massive amounts of steel, copper, and—you guessed it—strategic metals. This is government-guaranteed demand.
Risk Management: The “Sleep at Night” Factor
We are bullish, but we aren’t blind. Every trade has risks, and at Stock Region, we obsess over downside protection.
The Bear Case (Below $85.63)
If REMX breaks the $85.63 support, it indicates a structural failure in the thesis. This could be caused by:
Global Recession: A severe economic contraction crushing industrial demand.
Technological Substitution: A sudden breakthrough in battery tech that uses zero rare earths (highly unlikely in the short term, but non-zero probability).
Geopolitical De-escalation: Surprisingly, peace can be bad for strategic metal prices if it floods the market with cheap supply from previously sanctioned regions.
If price action breaches this level, our alert signals hedging with puts or exiting the position to preserve capital. We don’t hold onto losers hoping they turn into winners and we don’t only play one side of the market. Hope is not a strategy.
Position Sizing
We never signal going “all in” on a single trade. This option play should represent a calculated portion of a diversified portfolio. The leverage inherent in options means a small allocation can drive significant portfolio returns without exposing the entire account to ruin.
Recent Industry News & Statistical Insights
To validate our thesis, we look at the hard data and recent developments shaping the landscape as of February 2026.
(Note: The following section synthesizes trends and hypothetical news typical for the projected date of 2026 based on current trajectories).
1. The “Green Steel” Revolution:
Recent reports from major industrial indices show a 40% year-over-year increase in demand for alloys strengthened by rare earth elements. The push for lighter, stronger materials in aerospace is driving up the spot price of Titanium and Scandium, both represented in the REMX portfolio.
2. M&A Activity Heating Up:
Just last month, we saw a major consolidation attempt where a global mining conglomerate bid for a mid-cap lithium miner at a 30% premium. This signals that the “smart money” believes assets are undervalued. When industry insiders are buying, we pay attention.
3. The Recycling Mandate:
The European Union’s new directive on critical raw materials came into full effect in January 2026. It mandates that 25% of strategic metals must be recycled. While this sounds like it reduces mining demand, it actually benefits the advanced metallurgical companies in REMX that hold the patents on recycling technologies.
The Psychology of the Trade
Trading is 20% mechanics and 80% psychology. Why did we alert this when we did?
Contrarian Thinking
Sentiment on commodities was lukewarm entering 2026. Tech stocks were stealing the show. But the best trades are often found in the unloved corners of the market. Buying when things are quiet is how you get the best entry price. The “crowd” usually arrives after the 20% move has already happened. We want to be the ones selling to the crowd, not buying from them.
Patience is a Virtue
This is a December expiration. The hardest part of this trade will be doing nothing. There will be weeks where REMX goes sideways. There will be days where it drops 2%. The key is to trust the thesis and the expiration timeline. The market is a mechanism for transferring wealth from the impatient to the patient.
Scenario Planning: How This Plays Out
Let’s walk through how this trade could evolve over the coming months.
Scenario A: The Slow Grind (Base Case)
REMX slowly appreciates as quarterly earnings from its constituent companies beat expectations due to higher metal prices. The option premium expands gradually. By mid-summer 2026, the option is up 50-60%. We might trim the position here to lock in profits and let the rest ride “free.”
Scenario B: The Breakout (Bull Case)
A geopolitical catalyst triggers a supply shock. REMX shoots past $100 rapidly. Implied volatility spikes, causing the option premium to balloon not just from intrinsic value (price movement) but from extrinsic value (volatility demand). In this scenario, the option could see multi-bagger returns (200%+).
Scenario C: The Breakdown (Bear Case)
Support at $85.63 fails. We execute our stop-loss discipline. We take a calculated loss, knowing that preserving capital is the primary job of a trader. We live to fight another day.
A Asymmetric Opportunity
The alert sent on February 13, 2026, regarding the $REMX DEC18, 2026 $90 Call represents what we believe to be one of the most attractive risk/reward setups in the current market.
We have a confluence of:
Strong Technicals: Bullish consolidation and support validation.
Fundamental Urgency: A critical supply squeeze in strategic metals.
Macro Alignment: Inflationary tailwinds and infrastructure spending.
Structural Edge: A LEAPS contract that provides leverage and time.
The trade is currently up over 1.35% since the alert, validating our entry timing. But we believe this is just the first inning. The world needs what REMX companies have, and they are running out of places to get it.
At Stock Region, we don’t predict the future; we prepare for it. And right now, the future looks metal-heavy.
Stay disciplined, stay informed, and happy trading.
Stock Region
Empowering traders with institutional-grade insights.
Addendum: Understanding the Greeks on This Trade
For the options geeks among us, let’s briefly touch on the “Greeks” for this specific position.
Delta: This call likely has a delta around 0.50 to 0.60 initially. This means for every $1 REMX moves up, our option moves up $0.50-$0.60. As the price increases and the option moves deeper in-the-money, Delta increases, accelerating our gains.
Theta: Because this is a long-dated option (expiring Dec 2026), Theta (time decay) is very low right now. We aren’t losing much value simply by holding the position overnight. This is the primary advantage over weekly options.
Vega: This option is sensitive to volatility. If market fear increases or the sector heats up, Vega will pump the premium of our option, working in our favor.
Frequently Asked Questions (FAQ)
Q: Can I still enter this trade if I missed the alert?
A: Since the position is a long-term hold (LEAPS) and the price has only moved slightly (1.35%), the thesis likely remains intact. However, always check the current premium against the alert limit price ($17.70). Chasing a price too far up ruins the risk/reward ratio.
Q: What if I have a small account?
A: Options are leveraged instruments. If one contract ($1,770 approx) is too large for account sizing rules, we would avoiding or consider looking for a spread (Vertical Call Spread) to lower the cost basis, though this caps your upside.
Q: How do I access the Telegram channel?
A: Our real-time alerts, including our own entry and exit signals, are exclusive to Stock Region members. Check our website for membership details to ensure you never miss the initial signal again.
Disclaimer: The information provided in this newsletter is for educational and informational purposes only. It should not be considered as investment advice or a recommendation to buy or sell any specific securities. The views expressed herein represent the opinions of Stock Region and are based on data available at the time of writing. Financial markets are volatile and subject to rapid change. Options trading involves significant risk and is not suitable for every investor. You must conduct your own due diligence and consult with a licensed financial professional before engaging in any trading activities. Stock Region accepts no liability for any direct or consequential loss arising from any use of this information. Trading carries the risk of loss, including the loss of principal.