Figma's Sudden 8.1% Plunge: What's Behind the Tech Star's Freefall?

Summary
• Figma (FIG) slumps 8.13% to $33.44, its lowest since 2025-11-20
• Intraday range of $33.36–$36.535 highlights sharp volatility
• Leverage Shares 2X Long FIG Daily ETF (FIGG) crashes 16.12%, amplifying bearish sentiment

Today’s market action paints a stark picture for Figma, a once-rising star in the application software sector. With the stock trading near its 52-week low of $32.83 and technical indicators flashing red, investors are scrambling to decipher the catalyst. The broader tech sector shows mixed signals, but Figma’s collapse appears self-contained, driven by a confluence of technical exhaustion and speculative positioning shifts.

Bearish Momentum and Short-Squeeze Vulnerability
Figma’s intraday collapse stems from a perfect storm of technical exhaustion and speculative unwinding. The stock’s 30-day moving average at $37.51 acts as a critical resistance level, now decisively breached. With RSI at 21.9 (oversold territory) and MACD (-0.68) below its signal line (-0.78), the technical case for further weakness is reinforced. The Bollinger Bands show the price near the lower band ($35.26), suggesting extreme volatility. Meanwhile, the lack of company-specific news points to broader market rotation out of AI/software plays, as seen in Adobe’s (-4.6%) sector leadership decline.

Application Software Sector Under Pressure as Adobe Drags Down Peers
The application software sector is broadly underperforming, with Adobe (-4.6%) setting the tone. Figma’s 8.1% drop outpaces the sector’s average decline, indicating potential liquidity imbalances. While Adobe’s struggles with metaverse R&D costs and AI integration challenges are well-documented, Figma’s collapse appears more speculative, driven by leveraged ETFs like FIGG (-16.1%) and short-covering dynamics in its options chain.

Bearish Playbook: ETFs and Options for the Downtrend
• RSI: 21.89 (oversold)
• MACD: -0.68 (bearish crossover)
• Bollinger Bands: $33.36–$39.66 (price near lower band)
• 30D MA: $37.51 (critical resistance)
• Leverage Shares 2X Long FIG Daily ETF (FIGG): -16.12% (amplifies directional bias)

Technical indicators confirm a high-probability continuation of the downtrend. Key support levels at $32.83 (52W low) and $31.50 (psychological round number) warrant close monitoring. The 2X leveraged ETF FIGG offers aggressive exposure but carries significant decay risk due to its daily rebalancing structure.

Top Options Picks:
1. FIG20260123C33.5
• Call Option
• Strike: $33.50
• Expiry: 2026-01-23
• IV: 54.93% (moderate)
• Delta: 0.5136 (moderate sensitivity)
• Theta: -0.1184 (rapid time decay)
• Gamma: 0.1251 (high sensitivity to price moves)
• Turnover: $37,834
• LVR: 26.73%
• Why: High gamma and moderate delta position this call to benefit from a rebound above $33.50 while managing time decay risks.
2. FIG20260123C34
• Call Option
• Strike: $34.00
• Expiry: 2026-01-23
• IV: 53.71% (moderate)
• Delta: 0.4498 (moderate sensitivity)
• Theta: -0.1095 (rapid time decay)
• Gamma: 0.1270 (high sensitivity to price moves)
• Turnover: $10,257
• LVR: 33.41%
• Why: Balances leverage (33.4% LVR) with gamma exposure, ideal for a potential bounce off the 52W low.

Payoff Analysis: At a 5% downside to $31.77, the 33.5 call would expire worthless, while the 34 call would lose 100% of its value. Aggressive bulls should wait for a confirmed rebound above $34.50 before initiating long calls.

Backtest Figma Stock Performance
The backtest of FIG's performance after an intraday plunge of -8% from 2022 to the present shows mixed results. While the stock experienced a maximum return of -0.91% over a 30-day period, the overall trend was negative, with returns of -3.35% over 3 days, -7.86% over 10 days, and -15.01% over 30 days. The win rates also indicate a higher probability of positive returns in the short term, with a 3-day win rate of 21.88% and a 10-day win rate of 28.13%, compared to a 30-day win rate of 25%. This suggests that while there is some potential for recovery in the short term, the stock has generally underperformed in the medium to long term following the intraday plunge.

Act Now: Position for the Next Leg Down or Rebound
Figma’s technical profile screams continuation of the downtrend, with RSI in oversold territory and Bollinger Bands signaling extreme volatility. However, the 52W low at $32.83 offers a critical support level to watch. Adobe’s (-4.6%) sector leadership decline underscores broader software sector fragility. For traders, the 2X leveraged ETF FIGG (-16.1%) and the 33.5/34 call options present high-risk/high-reward setups. Immediate action: Short-term bears should target $32.83 support, while bulls should wait for a clean break above $34.50 before committing capital.