Paramount Skydance Surges 4.48% Amid Volatile Intraday Action: What's Fueling the Rally?

Summary
• PSKY trades at $13.635, up 4.48% from $13.05 close
• Intraday range spans $13.44 to $14.10
• Options volume spikes with 6,189,362 shares traded
• RSI at 29.44 signals oversold territory but bearish MACD divergence persists

Paramount Skydance (PSKY) is experiencing a sharp intraday rebound amid a broader bearish technical backdrop. The stock's 4.48% surge to $13.635 has ignited options activity, with call options at the $14 strike seeing 2014 contracts traded. While the entertainment sector remains muted, the stock's technical profile suggests a potential short-term reversal could be in play.

Options Gamma Frenzy Drives Short-Term Volatility
The intraday surge in PSKY is being fueled by a surge in gamma-driven options activity. The $14 call options (PSKY20251226C14) have seen 2014 contracts traded with $46,801 turnover, indicating aggressive position building by market makers to hedge directional bets. This creates a self-fulfilling prophecy where increased call buying pushes the stock higher as market makers dynamically hedge their exposure. The 4.48% move has pushed the stock above its 30-day moving average of $14.94, creating a technical catalyst for further short-covering.

Gamma-Driven Call Options Outperform as PSKY Tests Key Resistance
• 30D MA: $14.94 (below current price)
• RSI: 29.44 (oversold)
• MACD: -0.686 (bearish), Signal: -0.545
• Bollinger Bands: $12.54 (lower) to $16.62 (upper)
• 200D MA: Data unavailable

Technical indicators suggest PSKY is in a short-term trading range with potential for a gamma-driven bounce. The $14.10 intraday high represents a critical psychological level that could trigger further call option buying. Two options stand out for aggressive positioning:

• PSKY20251226C14
- Call Option, $14 strike, 2025-12-26 expiry
- IV: 45.00% (moderate)
- Leverage: 97.27% (high)
- Delta: 0.3118 (moderate)
- Theta: -0.0489 (significant time decay)
- Gamma: 0.4930 (high sensitivity)
- Turnover: $46,801
- Payoff at 5% upside: $0.835 (18.5% return)
- This option offers optimal leverage with high gamma to capitalize on potential short-term volatility spikes.

• PSKY20251226C13.5
- Call Option, $13.5 strike, 2025-12-26 expiry
- IV: 48.05% (moderate)
- Leverage: 36.81% (high)
- Delta: 0.5755 (moderate)
- Theta: -0.0725 (significant time decay)
- Gamma: 0.5114 (high sensitivity)
- Turnover: $6,817
- Payoff at 5% upside: $1.335 (26.7% return)
- This option provides a balance between leverage and delta for directional plays.

Aggressive bulls should consider PSKY20251226C13.5 into a break above $14.10. The high gamma and moderate delta position this contract to benefit from a continuation of the gamma-driven rally.

Backtest Paramount Skydance Stock Performance
The backtest of the performance of PSKY after a 4% intraday increase from 2022 to the present reveals mixed results. While the 3-day win rate and 10-day win rate are both high at 43.18%, the 30-day win rate drops to 29.55%. This suggests that PSKY tends to perform well in the short term but may not maintain these gains over longer periods.

Gamma-Driven Rally Gains Momentum: Position for $14.10 Breakout
The PSKY rally appears to be entering a self-reinforcing phase as gamma-driven options activity amplifies price action. With the stock testing its 30-day moving average and options market positioning showing aggressive call buying, the $14.10 level becomes critical. If this level holds, the 2025-12-26 $13.5 call (PSKY20251226C13.5) offers a compelling leveraged play. Meanwhile, the entertainment sector leader Disney (DIS) is up 0.81% at $130.25, suggesting sector-wide risk appetite remains intact. Investors should monitor the $14.10 level for confirmation of a short-term reversal.