Advanced Drainage Skyrockets 16.24%—What’s Fueling This Volcanic Eruption?

Summary
• Advanced Drainage Systems (WMS) surges 16.24% to $132.41, breaking through intraday high of $134.83
• Earnings report scheduled for Aug 7, 2025, with $25M Texas flood relief donation amplifying sentiment
• Options frenzy: 2025-08-15 135C sees 561.54% price jump, 43.15% IV

Advanced Drainage Systems (WMS) is scripting a Wall Street thriller as its stock surges 16.24% to $132.41, fueled by a $25M Texas flood relief donation and anticipation of Q1 earnings. With options like WMS20250815C135 exploding 561.54%, traders are scrambling to decode this volatility. The stock’s 134.83 intraday high and 126.12 low paint a picture of a market on fire—what’s next for this drainage giant?

Earnings Anticipation and Philanthropy Ignite Short-Term Frenzy
WMS’s 16.24% surge is driven by two catalysts: an upcoming Q1 earnings report on Aug 7, 2025, and a $25M Texas flood relief donation. The latter, announced in real-time news, amplified investor sentiment by showcasing the company’s community engagement. Meanwhile, the stock’s 134.83 intraday high aligns with pre-earnings optimism, as historical data shows WMS often rallies before strong results. The 16.24% move also reflects a 13.3% outperformance against its 52W high of 166.03, suggesting short-term momentum is overpowering long-term caution.

Building Products Sector Mixed as Owens Corning Drags
The Building Products & Equipment sector is split, with Owens Corning (OC) down 0.26% despite WMS’s surge. OC’s decline highlights sector fragility amid rising material costs, while WMS’s philanthropy-driven rally underscores its unique positioning. However, WMS’s 16.24% move isn’t directly tied to sector trends—it’s a standalone event fueled by earnings speculation and ESG-driven sentiment.

Options Playbook: Leverage 51.39% and 55.24% Contracts for High-Volatility Play
• 200-day average: 119.97 (below) • RSI: 52.73 (neutral) • MACD: -0.18 (bearish) • Bollinger Bands: 122.13 (upper), 115.71 (middle) • Gamma: 0.0291 (high sensitivity) • Theta: -0.0308 (rapid time decay)

WMS’s 132.41 price is trading above its 200-day average of 119.97, suggesting short-term bullish momentum. The 52.73 RSI indicates neutrality, but the -0.18 MACD and 134.83 intraday high suggest a potential pullback. Key levels to watch: 135 (resistance) and 125 (support).

Top Option 1: WMS20250815C135
• Code: WMS20250815C135
• Type: Call
• Strike: 135
• Expiration: 2025-08-15
• IV: 43.15% (moderate)
• Leverage: 51.39% (high)
• Delta: 0.4129 (moderate)
• Theta: -0.4038 (rapid decay)
• Gamma: 0.0433 (high sensitivity)
• Turnover: 2,407
• Payoff (5% up): $3.905 (max(0, 139.03 - 135))
This contract offers explosive leverage (51.39%) and high gamma (0.0433), ideal for a short-term rally. The 43.15% IV and 2,407 turnover ensure liquidity.

Top Option 2: WMS20250919C145
• Code: WMS20250919C145
• Type: Call
• Strike: 145
• Expiration: 2025-09-19
• IV: 35.03% (moderate)
• Leverage: 55.24% (high)
• Delta: 0.2611 (moderate)
• Theta: -0.0859 (slow decay)
• Gamma: 0.0202 (moderate)
• Turnover: 11,440
• Payoff (5% up): $4.015 (max(0, 139.03 - 145))
This 55.24% leverage contract is a long-term play, with 11,440 turnover ensuring ease of entry/exit. The 35.03% IV and 0.0202 gamma balance risk and reward.

Action: Aggressive bulls should buy WMS20250815C135 for a 5% upside target of $139.03. Conservative traders may hold WMS20250919C145 for a post-earnings bounce.

Backtest Advanced Drainage Stock Performance
The backtest of WMS's performance after an intraday surge of 16% shows favorable short-to-medium-term gains, highlighting the strategy's effectiveness in capturing immediate price movements. The 3-Day win rate is 54.95%, the 10-Day win rate is 54.44%, and the 30-Day win rate is 58.87%, indicating a higher probability of positive returns in the immediate aftermath of the surge. The maximum return during the backtest period was 5.30%, which occurred on day 59, suggesting that while the strategy tends to deliver moderate gains, there is potential for outsized returns if held for a sufficient period.

Bullish Breakout or Earnings Mirage? Watch These 3 Levels
WMS’s 16.24% surge is a high-stakes poker game between earnings optimism and sector headwinds. The 135 resistance level and 125 support zone will dictate its next move. If the stock breaks 135, the WMS20250815C135 call option could deliver 51.39% leverage. Conversely, a drop below 125 would validate the MACD’s bearish signal. Owens Corning’s -0.26% drag adds sector caution, but WMS’s philanthropy-driven narrative offers a unique edge. Act now: Buy WMS20250815C135 for a 5% upside target or short WMS20250815P125 if 125 breaks.