Pagaya Technologies (PGY) Surges 7.4% on Q2 Earnings Triumph: Can This Bull Run Continue?

Summary
• Pagaya Technologies (PGY) surges 7.39% intraday to $33.68, hitting a 52-week high of $41.48
• Q2 earnings report reveals 540% year-over-year EPS jump and $326M revenue beat
• Technical indicators signal bullish momentum with RSI at 56 and MACD divergence

Pagaya Technologies (PGY) is riding a post-earnings euphoria as its stock surges 7.39% to $33.68, trading near its 52-week high of $41.48. The rally follows a Q2 earnings report that stunned analysts with a 540% EPS surge and a $326M revenue beat. With technicals flashing bullish signals and options volatility spiking, traders are scrambling to position for a potential breakout. This article dissects the catalysts, sector dynamics, and actionable strategies for navigating this high-octane trade.

Q2 Earnings Explosion Ignites Short-Term Bull Run
Pagaya’s 7.39% intraday surge is directly tied to its Q2 earnings report, which revealed a 540% year-over-year EPS jump to $0.64 and $326M revenue exceeding estimates by 0.79%. The earnings beat was driven by record network volume ($2.6B), a 30% YoY revenue increase, and a 72% surge in adjusted EBITDA. Management’s raised full-year revenue guidance ($1.25B–$1.33B) and new $2.5B forward flow agreement with Castlelake further stoked optimism. While the Zacks Rank 1 (Strong Buy) rating and 237.6% YTD outperformance suggest momentum, the absence of concrete guidance in the report has left room for speculative buying.

Options Playbook: Leveraging PGY's Bullish Momentum with Strategic Contracts
• MACD: 2.57 (bullish divergence from signal line 2.78)
• RSI: 55.97 (neutral, avoiding overbought/oversold extremes)
• Bollinger Bands: Upper $36.36, Middle $29.19, Lower $22.01 (price near upper band)
• 200D MA: $14.08 (far below current price, indicating strong momentum)

Pagaya’s technicals suggest a continuation of its bullish trend. The stock is trading near its 52-week high, with RSI in neutral territory and MACD showing a short-term bullish crossover. The iShares FinTech Active ETF (BPAY) and ARK Israel ETF (IZRL) offer leveraged exposure to PGY’s sector, with BPAY up 2.22% and IZRL up 1.31% today. For options, two contracts stand out:

• PGY20250815C35 (Call, $35 strike, 2025-08-15 expiry):
- IV: 81.40% (high volatility)
- Leverage Ratio: 22.93% (moderate)
- Delta: 0.4748 (moderate sensitivity)
- Theta: -0.1668 (rapid time decay)
- Gamma: 0.0906 (high sensitivity to price changes)
- Turnover: $142,586 (liquid)
- Payoff at 5% upside ($36.58): $1.58 per contract. This call benefits from PGY’s near-term momentum and high gamma, making it ideal for a continuation of the rally.

• PGY20250815C37 (Call, $37 strike, 2025-08-15 expiry):
- IV: 89.85% (very high)
- Leverage Ratio: 35.10% (aggressive)
- Delta: 0.3305 (moderate sensitivity)
- Theta: -0.1464 (rapid decay)
- Gamma: 0.0747 (moderate sensitivity)
- Turnover: $201,579 (highly liquid)
- Payoff at 5% upside ($36.58): $0.58 per contract. This contract offers aggressive leverage for a smaller move, appealing to traders betting on a breakout above $37.

Action Insight: Aggressive bulls should consider PGY20250815C35 into a test of $37. If the 52-week high is cleared, PGY20250815C37 could offer explosive returns.

Backtest Pagaya Technologies Stock Performance
The backtest of PGY's performance after a 7% intraday surge shows favorable short-to-medium-term gains, with the 3-Day win rate at 51.13%, the 10-Day win rate at 53.39%, and the 30-Day win rate at 55.88%. The maximum return during the backtest period was 18.03%, which occurred on day 58 after the event, indicating that PGY tends to continue performing well in the days following a significant intraday increase.

Bull Case Intact: Target $37 Breakout or $34.30 Support Test
Pagaya’s 7.39% surge is fueled by a Q2 earnings explosion and speculative momentum. Technicals and options data suggest the rally could extend, particularly if PGY clears $37. Traders should monitor the 200D MA ($14.08) as a critical support level and watch for a breakdown below $34.30 (intraday low). Meanwhile, sector leader JPMorgan Chase (JPM) is down -0.68%, indicating PGY’s move is idiosyncratic. Act now: Buy the PGY20250815C35 call for a bullish continuation or hold for a test of the 52-week high.