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Why LCID Stock Isn't Ready for a Turnaround
Posted On Dec 11, 2025 by Joshua Enomoto
Following market volatility — such as that impacting Lucid Group(NASDAQ: LCID) — one of the common retorts that retail investors will hear is to buy when there's blood on the streets. However, merely acquiring LCID stock or any other security simply because it printed red ink isn't much of a strategy. Indeed, it could be a quick road to ruin.
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Sure, it's incredibly tempting to consider the luxury electric vehicle manufacturer. While Tesla(NASDAQ:TSLA) undoubtedly dominates the sector, an argument can be made that its vehicles have become a bit too synonymous with modern mobility. In other words, the design element — which was once so avant-garde — is becoming mundane. Lucid vehicles help enliven the stale environment.
Unfortunately, the investment narrative really hasn't caught on. As much as I believe that Lucid cars look absolutely gorgeous — and I'm clearly not alone in that opinion — such sentiments aren't going to drive the market. Ultimately, the negotiations between bulls and bears have, so far, decisively favored one direction. Since the January opener, LCID stock is down 57%. In the trailing five years, it hemorrhaged 87%.
LCID stock appears to be cooked, as the kids like to say.
Of course, with Lucid gaining more than 4% during the midweek session, some might be tempted to throw some speculation-earmarked funds toward the EV manufacturer's way. However, even from that perspective, the data doesn't seem to support the contrarian hypothesis.
Reflexivity Can Be a Tool, But Only for the Right Opportunity
When retail talks about buying the dips, they're broadly digging into the concept of reflexivity. A term popularized by George Soros, reflexivity refers to the theory that investor perceptions and market prices influence each other in a two-way feedback loop. As the dynamic quickly evolves, the price of the target asset can become disassociated from the fundamentals. Therefore, public securities encounter boom-bust cycles rather than linear progressions.
In a meta-quantum sense but colloquially articulated for the market, reflexivity loosely implies that observation changes reality.
Because of this phenomenon, both bullish and bearish speculators need to be cautious about their approach to LCID stock. For example, given Lucid's chart performance, the overriding sentiment is almost surely negative. However, there may be a certain point — as the midweek session demonstrated — where LCID collectively becomes a perceived discount.
At that point, it may not matter how bad the fundamentals are. From the emotional mindset of current buyers, LCID stock is a discount — and the rising price serves as a feedback loop affirming that the window of opportunity is closing.
Still, even with acknowledging this phenomenon, just the fact that it could materialize isn't necessarily enough to justify a trade in LCID stock. Fortunately, we can measure reflexivity — or more precisely, measure its distributional impact across a fixed period of time.
In this manner, we can make a data-driven evaluation rather than an emotional one.
Analyzing the Distribution and Not the Event of LCID Stock
One of the most common practices in financial trading is to exclusively view public securities as a function of time. However, this relationship merely involves temporal indexing. In reality, price is a function of state. Of course, the problem is that no one truly knows what that state is.
Without going too deep down the rabbit hole, even the most advanced quantum computers would likely not calculate the true driving state of market kinesis. Even if this magic formula were somehow revealed, the act of observing the true state would change the state, which goes right back to the reflexivity phenomenon.
What we can do, though, is measure the likelihood and propensity of reflexive behaviors. In other words, no one knows why LCID stock moves the way it does. However, we can anticipate through the observation of past analogs where LCID may end up given certain conditions.
The above point is the core reason why I adopt a discretized, frequentist logic. If we were to simply analyze one continuous strand of data, certain one-off events could distort expectations. However, if we split this strand into multiple rolling windows or trials of data, rare aberrations would be neutralized. At the same time, certain price points will feature a higher density of outcomes than others.
Consider the tread marks on the road. Not every area of the pavement features even wear and tear because vehicles tend to drive on certain parts of the road more so than others. Similarly, by viewing price action as multiple trials, the geometric structure of risk materializes.
My thesis is ultimately a simple one: we can use risk geometry to make better decisions regarding LCID stock.
Putting Theory to Work for Lucid Group
Using the above methodology, the forward 10-week returns of LCID stock can be arranged as a distributional curve, with outcomes ranging between $10 and $14 (assuming an anchor price of $12.98, Wednesday's close). Further, price clustering would likely be predominant around $12, thus implying a strongly negative bias, which is honestly not surprising.
Here's the problem I'm running into. If we were to isolate the frequentist logic to the current quantitative signal at hand, the 3-7-D sequence, the outcome doesn't materially improve. Historically, when LCID stock has printed three up weeks and seven down weeks (with an overall downward slope), the 10-week returns would effectively narrow to between $10.70 and $13.40. Price clustering would still occur around the vicinity of $12, give or take a few cents in either direction.
Even under the most optimistic scenario, you're still looking at a tendency for a negative bias.
Regrettably, then, the prudent approach may well be bearish. In that regard, the only idea I would remotely consider is the 13/11 bear put spread, expiring February 20, 2026. This trade requires LCID stock to fall through the $11 strike price at expiration to trigger the maximum payout, an ambitious target. About the only saving grace here is that the breakeven price of $11.65 is contextually realistic.
But would I take the trade? At this moment, no. With a maximum payout of only 48.15% at the time of writing, that's a lot of risk for relatively minimal reward — to me, a clear signal that the put options are overpriced.
Essentially, everyone is expecting LCID stock to tumble. If you're really dead-set on the bearish trade, it may be better to wait for LCID to rise more for a better deal.
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