DailyPlay – Opening Trade (AFRM) – November 14, 2025

AFRM Bearish Opening Trade Signal

Investment Rationale

Investment Thesis
Affirm Holdings faces mounting pressure as the macro backdrop for consumer credit weakens, creating a challenging environment for high-growth, high-valuation lenders. Rising delinquency rates, tightening household balance sheets, and persistent high interest costs heighten the risk that Affirm’s growth trajectory slows meaningfully from current levels. With the stock trading at a premium multiple despite decelerating fundamentals, the setup favors a bearish stance as the market reassesses forward expectations.

Technical Analysis
Price action reinforces the downside narrative, as AFRM continues to fail at the 50-day moving average. The stock has tested this level three times since October without breaking through, reflecting weakening momentum. This repeated rejection suggests growing vulnerability to a move toward the lower end of its multi-month range, possibly toward the 200-day moving average.

Fundamental Analysis
Despite strong headline growth metrics, AFRM’s valuation remains stretched relative to its industry, leaving little margin for error as credit conditions deteriorate. The company’s elevated forward earnings multiple and subpar profitability raise concerns about its ability to navigate a slowing consumer backdrop. Paired with rising delinquency trends and a higher cost of capital environment, AFRM’s risk-reward profile skews negative.

• Forward PE Ratio: 86.92x vs. Industry Median 23.37x
• Expected EPS Growth: 137.15% vs. Industry Median 12.25%
• Expected Revenue Growth: 23.95% vs. Industry Median 9.40%
• Net Margins: 6.74% vs. Industry Median 8.65%

Options Trade
A defined-risk bearish position is structured through the December 26, 2025, 74/84 call credit spread, sold for a $3.50 credit. The spread offers a $6.50 maximum loss, creating a reward-to-risk ratio of 1:1.86. The trade benefits if AFRM remains below the $74 strike. Elevated option premiums, supported by high implied volatility, make selling call spreads appealing at these levels.

AFRM – Daily

Trade Details

Strategy Details

Strategy: Short Call Vertical Spread

Direction: Bearish Credit Spread

Details: Sell to Open 3 AFRM Dec 26 $74/$84 Call Vertical Spreads @ $3.50 Credit per Contract.

Total Risk: This trade has a max risk of $1,950 (3 Contracts x $650) based on a hypothetical $100k portfolio risking 2%. We suggest risking only 2% of the value of your portfolio and divide it by $650 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: Neutral/Neutral

Relative Strength: 9/10

OptionsPlay Score: 100

Stop Loss: @ $7.00 (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 Thursday’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