Core terms
Catalyst (news catalyst)
A news item or filing, such as an earnings release, trial result, contract or financing, that explains why a stock is unusually active. A catalyst is a condition that shifts the odds, not a signal.
Most large small-cap moves start with news. The same type of headline can lead to a stock that holds its gains all day or one that gives them back within minutes, because the market's reading, the credibility of the source and the company's financing needs all differ.
Four features are worth recording: the type (earnings, clinical, contract, offering, corporate action), the timing relative to the session (overnight, intraday with a possible news halt, after hours), the source (company release, filing, regulator or third party) and the company's capacity to sell new shares, such as an active shelf or ATM program. Material agreements are often reported on Form 8-K, generally within four business days, so the filing can trail the headline.
A catalyst answers "why is this stock active today?" Whether trading it has positive expectancy after costs is a separate question.
What traders should verify
Log the catalyst type, source and time in ET with each trade, plus whether dilution capacity was active, so results can later be grouped by catalyst.
Do not conflate
Trader usage; there is no official definition. A catalyst label is often assigned after the move, which is hindsight. Unverified, recycled or promoted headlines are a different kind of claim from a filing.
Primary source
Trader usage: there is no official definition, and platforms and tools may calculate it differently.