PATH Earnings Trade: Capitalizing on Pre-Market Rally

PATH Earnings Trade Overview (QS Premium) — 2025-12-03

Direction: BUY CALLS
Confidence: 60% | Conviction: Medium
Expiry: 2025-12-05 (2 days)
Strike Focus: $15.00
Entry Range: $0.91
Target 1: $1.35 (+50%)
Target 2: $1.80 (+100%)
Stop Loss: $0.54 (-40%)
Position Size: 2% of portfolio

Market Context & Analysis

Katy AI: Neutral, slightly bearish (-3.73%, 50% confidence) → mild downward pressure.

Technical: Pre-earnings rally +7.48%, price near daily high ($14.87/$14.92), MACD bullish, stochastics overbought (82.4).

News: Earnings today; strong fundamentals — 100% beat rate, +41.4% avg surprise, 401% revenue growth.

Options Flow: Neutral PCR 0.77, implied move 13.3% ($1.97), some hedging at $16 put.

Risk Level: ELEVATED — high volatility (221% IV), Katy AI conflict, earnings binary event.

Trade Rationale

Edge: Strong fundamental history, earnings beat momentum, pre-market institutional positioning outweighs slight technical overbought and Katy’s bearish signal.

Timing Advantage: Earnings today with large implied move → positioned for post-earnings continuation.

Risk Management: Delta 0.511, tight stop, reduced size (2%) due to conflicting signals and extreme IV.

⚠️ Note: Extremely high volatility; monitor closely during earnings release, scale in/out to manage risk.