How could the potential lawsuit settlement or judgment affect Snap's short‑term stock price and volatility?

A potential settlement or adverse judgment in the securities‑fraud suit will act as a binary catalyst for SNAP in the near term. If the case resolves in Snap’s favor—or the exposure is capped at a modest amount (e.g., a few million dollars)—the market will likely view the headline risk as removed and the stock could rally 3‑5% on the day of the announcement, with implied volatility (IV) compressing sharply (a 20‑30% fall in the 30‑day IV rank). Conversely, a large cash settlement, an earnings‑impacting accrual, or a judgment that forces Snap to restate results would trigger an immediate sell‑off, potentially wiping out 6‑10% of the share price and inflating IV to historic highs as traders scramble for hedges.

From a technical perspective, SNAP is currently trading near its 20‑day EMA and just below a short‑term resistance band around $12.50. A positive resolution could break this level on high volume, allowing a short‑term move toward the next resistance near $14.5 (the 50‑day EMA). A negative outcome is likely to breach support at $10.8 and test the $9.5–$9.0 area, where stop‑loss orders for many long positions sit, amplifying the decline. Traders should consider positioning ahead of the settlement date (mid‑October) by buying out‑of‑the‑money call spreads if they expect a favorable outcome, or buying protective puts / put spreads if they anticipate a hefty judgment. In either case, keep tight stop‑losses and be prepared for a volatility spike that can widen option premiums dramatically.