Safety Shot Skyrockets 30%—What’s Fueling This Volatile Surge?

Summary
• Safety Shot (SHOT) surges 30% intraday, trading at $0.9601 amid a $16.3M financing announcement.
• The stock swings from a $0.73 open to $1.0 high, with 8.83% turnover and a -4.97x dynamic PE.
• Institutional investors like XTX Topco and Creative Planning boost stakes, while others exit entirely.
• The move follows a merger with Yerbaé and a capital raise to fund operations, but risks remain.
Today’s 30% pop in Safety Shot is a textbook case of volatility. The stock’s sharp rebound from a 52-week low of $0.23 to $0.9601—amid a $16.3 million financing and merger integration—has ignited a frenzy of options trading and institutional activity. The question now is whether this is a sustainable rally or a short-lived spike.

Capital Injection and Merger Fuel Safety Shot’s Volatility
Safety Shot’s 30% intraday surge is directly tied to its $16.3 million financing round and recent merger with Yerbaé. The registered direct offering of 22.99 million shares at $0.461 and warrants to purchase 45.99 million shares at $0.125 per warrant injected liquidity, while the merger announcement signaled strategic expansion. CEO Jarrett Boon emphasized the funds would strengthen the balance sheet and accelerate commercial growth. However, the correction of pricing figures in the release and the stock’s -4.97x PE ratio highlight underlying risks, including Nasdaq compliance concerns and reliance on external financing.

Options Playbook: Leveraging Volatility in a Raging Bull
• 200-day MA: $0.6168 (above); RSI: 68.86 (neutral-bullish); MACD: 0.0723 (positive divergence).
• Bollinger Bands: Price at $0.9601 is 1.24 SD above the 20-day MA, indicating overbought conditions.
• Kline pattern: Short-term bullish trend, long-term ranging; key support/resistance at $0.30–$0.50.
• SPXL (SPXL) and UPRO (UPRO) are leveraged S&P 500 ETFs with 1.32% and 1.29% gains, respectively, offering macro alignment.
Top Options:
• SHOT20250815C1 (Call, Strike $1, Expiry 2025-08-15): IV 260.87%, Delta 0.5909, Theta -0.0056, Gamma 0.6248, Turnover $30,388. High liquidity and gamma suggest strong short-term momentum. If SHOT closes above $1 by August 15, this call could yield 110% gains.
• SHOT20251121C1 (Call, Strike $1, Expiry 2025-11-21): IV 204.92%, Delta 0.7065, Theta -0.0016, Gamma 0.3125, Turnover $12,234. Moderate IV and high delta indicate potential for capital preservation if the rally extends into Q4.
Aggressive bulls may consider SHOT20250815C1 into a breakout above $1.0, while SHOT20251121C1 offers a longer runway for a sustained rally.

Backtest Safety Shot Stock Performance
The backtest of SHOT's performance after an intraday surge of 30% indicates mixed results. While the 3-day win rate is 44.10%, the 10-day win rate is slightly lower at 43.08%, and the 30-day win rate is 38.97%. This suggests that SHOT tends to perform well in the short term following a significant intraday surge, but the returns diminish over longer time frames. The maximum return during the backtest period was 5.06%, which occurred on day 27, indicating that while there is potential for gains, the strategy's effectiveness is limited by the subsequent decline in returns.

Act Now: Safety Shot’s Volatility Demands Precision
Safety Shot’s 30% surge is a high-stakes gamble, driven by a capital raise and merger optimism but shadowed by regulatory risks and a -4.97x PE. The stock’s short-term bullish trend and overbought RSI (68.86) suggest caution, while the $1.0 strike calls offer aggressive upside. Watch for a breakdown below the 200-day MA ($0.6168) or a sustained move above $1.0. Meanwhile, the sector leader Coca-Cola (KO) fell 1.08%, signaling broader market caution. Investors must balance the potential of SHOT’s leveraged options with the risk of a sharp correction. The key takeaway: position for volatility, but hedge against downside exposure.