How might the lawsuit investigation affect Soleno Therapeutics' short‑term stock volatility and trading volume?

The announcement of a Pomerantz‑led securities‑fraud inquiry will almost certainly inject short‑term turbulence into SLNO. In the first 24‑48 hours the stock is likely to experience a sharp, volatility‑driven price swing as both risk‑averse holders rush to liquidate and speculative traders pile in on the news‑driven move. Empirically, similar “investor‑alert” filings on small‑cap biotech names have produced 10‑15 % intraday moves and a 2‑3× surge in average daily volume (often hitting the 1‑million‑share threshold for a stock that usually trades 300‑400 k shares). Expect the implied volatility (IV) on any listed options to spike by 30‑50 % as market makers reprice the heightened event risk.

From a technical standpoint, the stock is presently hovering near its 20‑day EMA and just below a short‑term resistance band around $3.20. A breach to the downside—driven by panic selling—could trigger a rapid descent toward the 50‑day EMA (~$2.90) and the $2.70 support zone, while a bounce on heavy short‑covering could briefly test the $3.40 ceiling before the price settles back into a tighter range. Traders can exploit the expected volume boost by selling call spreads (e.g., $3.30/$3.60) to collect elevated premiums or entering a tight put‑credit spread (e.g., $2.70/$2.40) if they anticipate a rebound after the initial shock. In either case, tight stop‑losses (5‑7 % for directional plays, 10 % for spread positions) are essential, as the event‑driven swing can reverse quickly once the investigation’s details become clearer.