DailyPlay – Opening Trade (AFRM) & Closing Trade (FDX) – December 16, 2025

Closing Trade

• FDX – 52% gain: Buy to Close 3 Contracts (or 100% of your Contracts) Jan 02 $265/$255 Put Vertical Spreads @ $1.94 Debit. DailyPlay Portfolio:  By Closing 3 Contracts, we will be paying $582. We initially opened these 3 contracts on November 25 @ $4.07 Credit. Our gain, therefore, is $639.

AFRM Bearish Opening Trade Signal

Investment Rationale

Investment Thesis
Affirm (AFRM) presents an attractive bearish opportunity as optimism around long-term growth continues to run ahead of the company’s underlying profitability profile and competitive positioning. While sentiment across consumer fintech has improved, AFRM remains vulnerable to valuation compression and execution risk as investors reassess the sustainability of growth in a more normalized credit and rate environment. With the stock already pricing in a favorable forward narrative, upside appears capped, creating a favorable setup for a defined-risk bearish options structure that benefits from consolidation or downside drift rather than requiring a sharp selloff.

Technical Analysis
From a technical perspective, AFRM has struggled to maintain momentum following prior rallies, with price repeatedly stalling near overhead resistance and failing to establish a sustained uptrend. Recent advances have occurred on diminishing momentum, leaving the stock susceptible to mean reversion as buyers lose conviction at higher levels. The broader structure suggests a range-bound to bearish bias, where rallies into resistance are more likely to fade than accelerate, favoring strategies that benefit from time decay and limited upside follow-through.

Fundamental Analysis
AFRM’s valuation reflects aggressive growth assumptions that leave little margin for error. While EPS and revenue growth expectations significantly outpace peers, the stock trades at nearly four times the industry valuation multiple despite operating with inferior margins, raising concerns around the sustainability of returns.

• Forward PE Ratio: 71.70x vs. Industry Median 22.53x
• Expected EPS Growth: 142.88% vs. Industry Median 10.99%
• Expected Revenue Growth: 25.14% vs. Industry Median 9.35%
• Net Margins: 6.74% vs. Industry Median 9.08%

Absent continued flawless execution, AFRM’s elevated multiple appears vulnerable, with downside risk driven by even modest growth or margin disappointments.

Options Trade
To express this view, consider selling the AFRM Jan 30, 2026 66/76 call vertical for approximately $4.02. This trade sells the 66 call and buys the 76 call, defining risk while positioning the trade to profit if AFRM remains below the lower strike through expiration. The structure offers maximum profit of $4.02 versus maximum risk of $5.98, resulting in a 0.67:1 reward-to-risk ratio. This setup is well-suited for a bearish-to-neutral outlook, as the long-dated expiration provides ample time for valuation pressure or technical weakness to emerge, while the capped call spread limits upside exposure and allows time decay to work in favor of the position.

AFRM – Daily

Trade Details

Strategy Details

Strategy: Short Call Vertical Spread

Direction: Bearish Credit Spread

Details: Sell to Open 3 AFRM Jan 30 $66/$76 Call Vertical Spreads @ $4.02 Credit per Contract.

Total Risk: This trade has a max risk of $1,794 (3 Contracts x $598) based on a hypothetical $100k portfolio risking 2%. We suggest risking only 2% of the value of your portfolio and divide it by $598 to select the # contracts for your portfolio.

Trend Continuation Signal: This is a bearish trade on a stock that is expected to continue lower over the duration of this trade.

1M/6M Trends: Bearish/Mildly Bearish

Relative Strength: 4/10

OptionsPlay Score: 110

Stop Loss: @ $8.04 (100% loss to value of premium)

View AFRM Trade

Entering the Trade

Use the following details to enter the trade on your trading platform. Please note that whenever there is a multi-leg option strategy, it should be entered as a single trade. 

PLEASE NOTE that these prices are based on Monday’s closing prices. Should the underlying move significantly during the pre-market hours, we will likely adjust the strikes and prices to reflect a more accurate trade entry. 

View AFRM Trade