Options Corner: QuantumScape Could Be Tipping Its Hand For A Quick Breakout Move

Ranking among the most actively traded names on Thursday, QuantumScape Corp (NASDAQ:QS) has long dazzled investors for its potential catalyst targeting the electric vehicle sector. Specializing in solid-state battery technology, QuantumScape aims to usher in a future where EVs enjoy the trifecta of greater range, more safety and lower cost. Subsequently, QS stock has nearly doubled in value over the trailing year, though the overall journey has been volatile.

Like any tech innovator, QuantumScape is going through growing pains as it attempts to traverse a credibility gap. To be sure, ongoing progress in its research and development have helped lift QS stock throughout 2025. Still, the journey has been chaotic, featuring multiple bullish and bearish cycles of extreme magnitude. What’s more, in the past five years, QS is down about 81%, reflecting lingering viability concerns.

Still, from an options traders’ perspective, QuantumScape stock arguably presents an ideal kinetic platform. By identifying the security’s behavioral patterns, we can attempt to jump the gun ahead of a projected move.

In many ways, options trading is like football. A defense doesn’t merely react to what the offense is doing; instead, prior to the game, it studies the opponent’s tendencies and crafts defensive schemes accordingly. For example, if an offense lines up in a shotgun formation, the defense generally anticipates that a pass is coming. While the offense could choose to run the ball, the shotgun’s structure incentivizes a passing attempt.

Similarly, when stocks are structured in a certain way — whether bullish, bearish or neutral — their forward outcomes (across multiple trials) may vary. That’s because the participatory sentiments undergirding contrasting structures are different, generally leading to different end results.

By anticipating these differences, we can position ourselves ahead of these potential swings, allowing us to extract profits.

Calculating The Potential Next Move Of QS Stock

From a meta perspective, the stock market functionally operates under a Markov property. Essentially, the future state of the system depends only on the current state. In other words, there’s really no such thing as a universally considered “undervalued” or “overvalued” security. Instead, there are probabilistic transitions from one state to another.

While this may sound whimsically philosophical, the Markov property allows us to make data-driven decisions. For example, using the historical dataset of QS stock, we can calculate that, on average, any given 10-week period will likely see an outcome ranging between $9.40 and $11.60 (assuming a spot price of $11). With probability mass projected to peak at around $10.20, QS generally suffers from a negative bias under this fixed-time distribution.

However, under the current quantitative setup, the contrarian bulls may have an edge. In the trailing 10 weeks, QS stock printed only three up weeks, leading to an overall downward slope. Despite the negative implications, in the 10 weeks following the flashing of this signal, the security’s range of outcomes would be expected to shift forward, from $10 to $12.30.

To be fair, probability density would likely peak at around $11, the current spot price. However, risk topography — a three-dimensional view of demand structure — reveals a potentially intriguing dynamic.

Risk topography covers three elements: expected (terminal) price, probability density and population occurrence. With the first two stats covered, we’re looking at the third one. Interestingly, between $11 and $11.75, past analogs reveal that QS stock would be expected to traverse these levels over the course of the next 10 weeks before typically settling around $11.

My belief is that, with the potential of the company’s EV battery technology combined with fresh enthusiasm for the new year, the bulls may reflexively perceive QS stock as discounted. Therefore, a push toward the higher end of the distribution could be in play.

Aiming For A Rationally Aggressive Trade

Using the above market intelligence, the most rationally aggressive trade may be the 11/12 bull call spread expiring Feb. 20, 2026. This wager involves two simultaneous transactions: buy the $11 call and sell the $12 call, for a net debit paid of $42 (the most that can be lost).

Should QS stock rise through the second-leg strike ($12) at expiration, the maximum profit would land at $58, a payout of over 138%. Breakeven lands at $11.42, which is near the peak of probability mass relative to the statistical response of the 3-7-D sequence. Stated differently, the 11/12 call spread allows traders to balance risk exposure while also stretching for a high payout.

To be clear, a bull spread is a capped-risk, capped-reward transaction, meaning that a move higher than $12 at expiration won’t lead to greater returns. In my opinion, this tradeoff is worth it due to the discount we get on the $11 call. Based on the data, I’m not really seeing a strong probability of upside beyond $12. Therefore, it doesn’t make sense to pay for exposure to an event that might not materialize.

Granted, nobody knows for sure what tomorrow will bring. However, the statistical tendency under the current state is for QS stock to attempt to reach the $12 price level. Knowing that, we’re going to position ourselves early to intercept this pass.

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