Electric vehicle (EV) battery producer QuantumScape (NYSE:QS) is powering up today on news regarding options. More specifically, the date of some key options expirations is drawing nearer and shares are rising as a result.
QS stock is still in the throes of a highly volatile month but, for all the turbulence, the stock has demonstrated some overall impressive growth. Now, the company seems poised for even more growth as trading volume increases. Seeking Alpha reports that QuantumScape’s “options volume for December contracts is elevated in comparison to normal activity,” although QS stock still trades below its 100-day and 200-day moving averages.
Is QuantumScape destined to end the year on a high note? Let’s take a closer look at the company and its recent developments.
What’s Happening With QS Stock?
Despite losing some early trading momentum, QS stock is enjoying a rather good day. As of this writing, shares are up about 11%.
QuantumScape is a difficult company to properly assess. The firm operates in a fast-growing sector with significant potential. Indeed, InvestorPlace’s Luke Lango has praised its “forever battery” technology frequently, citing QS stock’s potential to mint new millionaires as QuantumScape changes how EVs are powered. However, the company’s solid-state battery tech is still in development. This may compel some investors to approach QS with caution.
That said, it makes sense for shares to be rising as the expirations for some key QuantumScape options approach. As WallStreetMojo explains:
“If many options contracts expire in the money (i.e., the stock price is above the strike price), the owners may exercise their options and buy the stock. This can increase the stock demand, potentially driving up the price.”
Of course, this doesn’t always happen, but it may be unfolding now based on how QS stock is moving today.
While the macroeconomic landscape hasn’t been great for the EV sector recently, that may also be about to change. InvestorPlace contributor Thomas Niel notes that once high interest rates and inflationary trends subside, market conditions will likely shift in favor of EV producers and EV-related stocks. That, in turn, could provide QS stock with the momentum it needs to keep rising even higher.
On the date of publication, Samuel O’Brient did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
