Rare Earths Stock Stays Hot on White House Buzz

USA Rare Earth Inc (NASDAQ:USAR) stock is red hot once more, last seen up 19.5% to trade at $27.13 after CEO Barbara Humpton indicated the company was in close discussions with the White House over a potential rare earths deal with the Trump administration. Sector peer MP Materials (MP), which inked its own government deal back in the summer, is up 2% this morning.

Just yesterday, USAR soared 23.4% to a then-record high of $23.37. Now, the shares are up 133.5% year to date, and have jumped nearly 400% off their March 27 lows of $5.56. The last two days of bull gaps have the stock breaking out above a trendline of higher highs carved from a June peak at $14. 

Short squeeze appeal is driving retail trader interest. Short interest is 35.6% higher in the last two reporting periods, and the 7.47 million shares sold short now account for 12.2% of the stock's total available float.

Calls dominate the options pits. Over at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), traders have bought to open 31,295 calls in the past two weeks, compared to 3,684 puts. Given the amount of short interest tied up in USAR, it's possible some of these calls could be bearish bettors seeking an options hedge.