Polestar A Soars 21.9% on Intraday Surge: What’s Fueling the Volatility?

Summary
• Polestar A (PSNY) surges 21.89% to $14.64, hitting a 2025 high of $14.86
• Turnover spikes to 1.07M shares, 1.49% of float, amid extreme technical momentum
• RSI at 73.56 signals overbought conditions, MACD histogram at 1.54 suggests bullish divergence
• Options chain sees heavy activity in 14-strike calls and puts ahead of 12/19 expiration. This explosive move in Polestar A, a stock already trading near its 52-week low of $11.75 just weeks ago, has ignited a frenzy of speculation. With the stock now within 75% of its 2025 peak of $42.60, traders are scrambling to decode whether this is a short-term volatility play or a structural shift in sentiment.

Technical Breakout Driven by Momentum and Options Gamma Squeeze
The 21.89% intraday surge in Polestar A is primarily a technical event, fueled by a confluence of overbought RSI (73.56), bullish MACD divergence (2.53 vs. 0.99 signal line), and a 52-week low-to-high range of 263%. The stock’s price action has triggered a gamma-driven options cascade: 528 contracts of the 14-strike April 2026 calls and puts have seen $199.86M in turnover, with implied volatility ratios (IVR) spiking to 160% for the 14-strike calls. This suggests aggressive positioning by algorithmic traders exploiting the stock’s extreme volatility, rather than fundamental catalysts. The absence of company-specific news further confirms this is a pure technical play.

Automotive Sector Mixed as Tesla Trails Polestar’s Volatility
While Polestar A’s 21.9% surge dwarfs sector peers, the broader automotive sector shows mixed momentum. Tesla (TSLA), the sector’s dominant player, rose 1.8% intraday, reflecting its role as a bellwether for EV sentiment. However, Polestar’s move is anomalous: no sector-specific news (e.g., EV subsidies, supply chain updates) justifies its extreme volatility. The divergence highlights Polestar’s speculative nature—its -0.44 dynamic P/E ratio and 1.49% turnover rate indicate a thinly traded stock prone to gamma-driven swings, unlike Tesla’s institutional-grade liquidity.

Capitalizing on Gamma Squeeze: High-Leverage Call Options and ETF Alternatives
• MACD: 2.53 (bullish divergence), RSI: 73.56 (overbought), Bollinger Upper Band: $13.34 (price at 14.64 is above), 200D MA: $1.20 (far below current price)
• Key Levels: Immediate resistance at $14.86 (intraday high), critical support at $12.08 (open price). A break above $14.86 could trigger a retest of the 52-week high ($42.60), but overbought conditions suggest caution.
• Top Options:
• PSNY20260116C14 (Call, $14 strike, 1/16/2026): IVR 101.56%, leverage ratio 6.91%, delta 0.61, theta -0.032, gamma 0.0828. High gamma ensures rapid premium growth if the stock gaps up.
• PSNY20260417C14 (Call, $14 strike, 4/17/2026): IVR 118.08%, leverage ratio 3.44%, delta 0.66, theta -0.016, gamma 0.0361. Lower gamma but extended time decay (theta) offers flexibility for a slower move.
• Payoff Analysis: A 5% upside to $15.37 would yield 69.35% return on the 1/16/2026 $14 call (delta 0.61) and 27.88% on the 4/17/2026 $14 call. The former’s high gamma makes it ideal for short-term volatility, while the latter balances time decay with moderate leverage.
• ETF Alternative: No leveraged ETF data available, but the iShares MSCI Global Clean Energy ETF (KOLD) offers sector exposure. However, KOLD’s 0.4% intraday move pales compared to Polestar’s volatility. Aggressive bulls should prioritize the 1/16/2026 $14 call for a gamma-driven play.

Backtest Polestar A Stock Performance
The backtest of PSNY's performance after a 22% intraday surge from 2022 to now shows mixed results. While the stock experienced a maximum return of 0.14% on the day following the surge, the overall short-term performance was lackluster, with the 10-day return being -0.38% and the 30-day return being -2.83%. The win rates for the 3-day, 10-day, and 30-day periods following the surge were 47.73%, 40.80%, and 34.67%, respectively. This indicates that while there was some positive movement in the immediate aftermath of the surge, the stock largely gave up those gains in the following weeks.

Act Now: Gamma Squeeze Intensifies as Polestar Approaches 52-Week High
Polestar A’s 21.9% surge is a textbook gamma-driven breakout, fueled by overbought technicals and heavy options turnover. While the stock’s -0.44 P/E ratio and speculative profile make it a high-risk trade, the 14-strike call options (PSNY20260116C14) offer a compelling leveraged play if the stock gaps up. However, the RSI at 73.56 and Bollinger Bands suggest caution: a pullback to $12.08 could trigger a reversal. Meanwhile, Tesla’s 1.8% rise underscores the sector’s mixed momentum. Traders should monitor the 14.86 resistance level and consider the 1/16/2026 $14 call for a short-term volatility play. Action: Buy PSNY20260116C14 if $14.64 holds; exit if the stock closes below $12.08.