To understand the bullish, options-driven case for MP Materials (MP), we first need to adopt a probabilistic mindset. Yes, Wall Street analysts regularly tout MP’s position in rare earth production—but let’s be honest: that story is already priced into the stock. What actually matters going forward is assessing the likelihood of future outcomes, and that’s where quantitative analysis becomes essential.
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The premise is straightforward: advanced technologies depend on large volumes of rare earth elements, and the U.S. is locked in strategic competition with China and others to secure supply chains. Under those conditions, MP has a structural tailwind. Pair that with the stock’s ~11% decline over the past month, and MP starts to look like a discount.
Again, we cannot trade this information because it’s already priced into MP stock. In order to carry an advantage into the market, we must have an uncommon edge. That’s where probabilistic thinking comes in. Instead of treating probability as an abstract idea, we treat it as though it were a physical object.
Of course, probability isn’t literally tangible. But by modeling it mathematically as if it had mass, shape, and a center of gravity, we can extract actionable insights—and potentially become far more effective options traders.
Probability as a Tangible Object
From a data science perspective, probability in the financial markets is fundamentally a spatial field. A field has a shape, curvature, gradients, peaks (modes), tails, and zones of concentration. Such topics represent a dramatic ontological shift because we’re now in the domain of probabilistic geometry rather than opinionated analysis of backwards-looking data.
By harping on curvatures and gradients, quantitative analysts risk talking well above the heads of the retail investing audience, making it a self-defeating exercise. However, by visualizing probability as a physical object, we can then conduct meaningful analysis. After all, if you wanted to hang a heavy frame on your wall, you would install it into the studs, not the flimsy drywall.
So too with assessing stock probabilities. If you want to profitably trade options — whether that be MP stock or any other security — you would primarily consider the point where the probability is thickest or densest. By logical deduction, if probability were a literal, physical object, you would nail the target strike price (or breakeven threshold) on the probability’s stud.
Obviously, the analogy can only go so far. No one knows the future so we can never speak of probabilistic studs in absolute terms. However, using mathematics to calculate probability provides a stronger foundation for speculative trades than mere prognostication based on subjective criteria.
Diving into the Wild Math Behind MP Stock
While the drywall analogy makes intuitive sense, you’ll notice that MP stock represents a singular journey across any time horizon. It’s impossible to generate a probability on a dataset of one. At this point, we need to conduct another wild, groundbreaking ontological shift: converting the continuous, scalar format of stock prices into discretized iterations.
You’ll notice that in my work, I’ve focused on 10-week sequences. The nominal figure isn’t particularly important; we could use a 20- or 30-series instead of a 10-series. The critical point here is not the actual number but its consistency in the dataset.
Essentially, by running 10-week rolling trials of MP stock, we estimate probabilities. Over hundreds or even thousands of attempts, my hypothesis is that a pattern will emerge. Moreover, different conditions should yield distinct patterns—a phenomenon well documented in GARCH (Generalized Autoregressive Conditional Heteroskedasticity) studies.
For MP stock, the forward 10-week returns can be arranged as a distributional curve, with outcomes likely to land between $56.50 and $60 (assuming Tuesday’s closing price of $58.21 as the anchor). According to the theory, price clustering should be predominant at around $57.95.
The above assessment aggregates all trials since MP’s initial public offering. However, we’re interested in MP’s current behavioral state, as reflected in the 3-7-D sequence: three up weeks, seven down weeks, with an overall downward slope.
Under this condition, the forward 10-week returns would likely range from $55 to $66, with price clustering predominantly at $61.95. That’s a massive 6.9% positive variance between probability densities, which can potentially be exploited by bullish options traders.
However, the center of mass of the 3-7-D sequence is somewhere between $60 and $62. That’s why it may not be prudent to go beyond $62 as a target strike — unless there’s a reason for your optimism.
If we’re applying the data, the 55/60 bull call spread expiring January 16, 2026, appears to be the most compelling. This trade requires MP stock to rise through the second-leg strike of $60 at expiration to trigger the max payout of 100%, which is a realistic target considering the probability density and center of mass.
If you really want to get aggressive, the 60/65 bull spread (also expiring January 16) is intriguing. Sure, the $65 strike is very aggressive. However, the breakeven price is at $61.90, which is right where the stud is. Plus, with a 163% max payout, it’s a very tempting proposition.
What is the Target Price for MP Stock?
Turning to Wall Street, MP stock carries a Strong Buy consensus rating based on 12 Buys, two Holds, and zero Sell ratings over the past three months. The average MP stock price target is $78.06, implying almost 30% upside potential over the coming 12 months.
Rethinking MP Materials Through a Probabilistic Lens
Most readers will likely finish this article believing that MP stock is a solid buy—and that may very well be true. But more importantly, I hope it shifts your view of the markets themselves. Instead of seeing finance as a simple series of bullish or bearish calls, think of it as a broad spectrum of possible outcomes, with reality eventually collapsing into just one of them.
That collapse—the moment when one scenario becomes the scenario—hasn’t happened yet. And until it does, investors have a powerful opportunity. By applying advanced mathematical tools and a probabilistic framework, we can evaluate not only what might happen but also the relative likelihood and potential payoff of each outcome.
This mindset doesn’t just help you decide whether MP is a buy; it enables you to understand the true risk-reward structure beneath the surface, giving you a more durable edge in a market that rarely rewards simplistic thinking.