# Why is it moving? Catalyst grading

> How Scalpel grades each headline by kind and strength, from fluff to explosive, why an offering is never good news, and how news timing compares to EDGAR.

Source: https://scalpeltrade.com/guides/catalyst-grading
Guide 9.4, Intel: borrow, dilution and catalysts. Intermediate, 7 min read.
Checked with Scalpel 1.12.8 on 2026-10-15. By Scalpel Team.

**In short:**

Scalpel grades every headline from the news providers on your IBKR account by kind (FDA, trial data, deal, earnings, M&A, hype, offering and more) and strength, from None to Explosive. The strongest recent one becomes a chip such as **FDA 4m**: green for strong news, blue for decent, grey for weak, and red for an offering, which is never graded as good news. A keyword grader answers instantly; with an OpenAI key, an AI grade replaces it within seconds.

"Why is it moving?" is the first question on any runner, and the answer decides a lot. FDA approval on a $20M company can carry it all day; a conference attendance press release usually cannot; an offering means the company is selling to the people buying the spike. Scalpel answers it on the scan row and the desk, so you do not have to open a news window while the stock moves.

**Before you start:**

- Intel on ([guide 9.1](https://scalpeltrade.com/guides/set-up-intel)), with **News** in its status lines showing your providers.
- Optional: an OpenAI key, for AI grading.

## Where the headlines come from

Scalpel uses the news providers your IBKR account already has through the API, such as Dow Jones and Briefing.com. There is no separate paid news feed. When it starts watching a stock, it loads the last **News history days** of headlines (3 by default), then streams new ones live. The same story arriving on several Dow Jones feeds within 10 minutes is merged into one, and market columns and roundups are never graded as a catalyst.

## Kinds and strength

Each headline gets a kind, shown on the chip:

| Chip | Kind |
|---|---|
| **FDA** | An FDA or other regulatory decision, designation or clearance |
| **Trial data** | Clinical trial results or data |
| **Deal** | A contract, order, partnership, licence or collaboration |
| **Earnings** | Financial results or guidance |
| **M&A** | A merger, acquisition, buyout or tender offer |
| **Hype** | A pivot into a hot theme: AI, crypto treasury, quantum, drones, nuclear, rare earths |
| **Uplist** | A move up to a major exchange |
| **Offering** | Raising money by selling stock, warrants or convertibles, or registering an offering |
| **Reverse split** | A reverse stock split |
| **Delisting** | A listing deficiency, a delisting notice, or regaining compliance |
| **Analyst** | An analyst rating or price target |
| **Legal** | Lawsuits, settlements, patents |
| **Fluff PR** | A press release with no real content, such as a conference appearance |
| **News** | Anything else |

And a strength, judged for a low-float momentum stock, not a large cap:

| Strength | Grade | Meaning |
|---|---|---|
| **Explosive** | 4 | Company-changing: FDA approval, a buyout, a contract bigger than the company, a hot-theme pivot |
| **Strong** | 3 | Important: positive trial data, a large contract, a strategic deal |
| **Moderate** | 2 | Real but ordinary: a meaningful contract, solid results, trial progress |
| **Weak** | 1 | Minor: a small order, a conference, a routine update |
| **None** | 0 | Nothing price-moving |

An offering is always red, whatever else the headline says, and never graded above weak: "Acme Prices $10 Million Offering Following FDA Approval" is offering news, not FDA news.

**Note.**

Grades run from 0 to 4 in fractions. The strength word in the hover card's list is the grade rounded, while the chip colour uses the exact grade: green from 3, blue from 2, grey below. So a 2.5 reads **Strong** in the list with a blue chip, and a 1.5 reads **Moderate** with a grey one.

## The chip and its card

The chip shows the lead catalyst: the strongest graded headline from the last 24 hours, newest on a tie. An offering headline always leads, so it can never hide behind good news. Automatic filing notices never lead. The chip's label is the kind and the headline's age: **FDA 4m**, **Deal 2h**, **Fluff PR 16h**.

Hover it for the verdict and the recent headlines, each with its age, strength and kind:

*Screenshot: ABCD's FDA 4m chip, hovered: Strong catalyst, then the headlines behind it. Demo data.*

| Chip colour | Card title | Card says |
|---|---|---|
| Green | **Strong catalyst** | Real news that can bring in buyers. The best runners have this |
| Blue | **Decent catalyst** | Can move it, but it needs volume to follow through |
| Grey | **Weak catalyst** | Little real news here. The move is mostly momentum or hype |
| Red | **Offering news** | The company is selling stock. Usually bad for longs: expect sellers into strength |

## How the grading works

**The keyword grader** runs on every headline the moment it arrives, and stands alone without an OpenAI key. It checks rules in order, dilution first, so an offering word wins over everything else, and shrinking or ending an offering program is correctly not dilution. A concrete dollar figure on a deal or result adds half a point.

| Headline | Keyword grade |
|---|---|
| Acme Receives FDA Approval for Lead Candidate | FDA, Explosive, green |
| Acme Reports Positive Topline Phase 2 Results | Trial data, Strong, green |
| Acme Signs $40 Million Supply Agreement With Major Retailer | Deal, reads Strong, blue chip (2.5) |
| Acme Launches Bitcoin Treasury Strategy | Hype, blue chip (2.5) |
| Acme to Present at Healthcare Conference | Fluff PR, Weak, grey |
| Acme Announces Pricing of $5 Million Registered Direct Offering | Offering, red |

**The AI grader**, with an OpenAI key and **Grade headlines** on, sends the headline (and the start of the article, when IBKR supplies it within a few seconds) with the ticker, price, change and market cap. It answers four questions: the kind, the strength against the company's size (a deal worth more than the market cap is huge for a micro cap), whether it raises money, and whether it is new information rather than a recap. Its grade replaces the keyword grade when it lands, usually within a few seconds; if it times out, the keyword grade stays. Of the history loaded at start, the 8 most recent headlines from the last 24 hours per stock are AI-graded.

## Alerts

*Screenshot: Intel toasts: a strong catalyst (blue), an offering on a stock you watch (amber), and a financing filing on a stock you hold (red). Demo data.*

- **A strong live catalyst**: graded Strong or Explosive (3 and up), judged new, and under 15 minutes old, on a stock intel is watching. An info toast and a sound, reading for example **ABCD FDA: Abcd Receives FDA Approval for Lead Candidate**. Turn these off with **Strong catalyst alerts** in Settings > Intel if they are too chatty.
- **An offering headline** always alerts and cannot be switched off: a red toast and a spoken exit warning on a stock you hold, an amber toast on one you only watch.

Click a toast to load its stock onto a desk. More in [guide 10.2](https://scalpeltrade.com/guides/alerts-and-toasts).

## Timing: news vs EDGAR

The news and the filings race each other. Dow Jones posts a line for each 8-K within about a minute of EDGAR. A company's press release usually hits the wires before the matching filing, and an offering priced in the evening usually reaches you as a headline hours before its 424B prospectus appears the next morning. Scalpel reads both ([guide 9.2](https://scalpeltrade.com/guides/check-dilution)), so whichever arrives first sets the chip.

Paid news terminals will be ahead on some headlines. The point here is having the news, the dilution read and the borrow read on the desk where you trade, graded the same way every time.

**Careful.**

A green chip is not a reason to buy on its own. Strong news on a company that is selling stock, or news that broke three hours ago and has already been traded, can fail fast. Small-cap momentum trading carries a significant risk of loss.

## What can go wrong

- **No catalyst chips anywhere.** Check the **News** line in Settings > Intel. "News: waiting for IBKR" means no providers are available to the API on your account.
- **A moving stock has no chip.** No headline on file in the last 24 hours, the only headlines are columns or filing notices, or the stock is past the 40 symbols intel follows.
- **The grade looks wrong.** Keyword grading is blunt. The AI grade is better at context; check **OpenAI: on** in the status lines.

## Questions

**Where does Scalpel get its news?**

From the news providers on your Interactive Brokers account, through TWS. Scalpel does not add or require any paid news feed.

**Why is an offering never good news in Scalpel?**

An offering means the company is selling new stock, often to the buyers of the spike. Both graders put dilution first, and the AI grade of an offering is capped at weak.

**Do I need an OpenAI key for catalyst grading?**

No. The keyword grader grades every headline without one. The key adds AI grading, which judges strength against the company's size and spots recaps.

**Why does the chip say Fluff PR?**

The headline is a press release with no material content, such as a conference appearance or a letter to shareholders. The move is mostly momentum or hype.

**How old can the catalyst on the chip be?**

Up to 24 hours. The age is on the chip, for example Deal 2h. Older headlines stay in the hover card's list but no longer lead.