Visa Plummets 2.5% Amid Trump's Credit Card Fee Cap Threat—Is This a Buying Opportunity?

Summary
• Visa (V) trades at $340.86, down 2.55% intraday amid sector-wide jitters
• Mastercard (MA) also down 2.38%, signaling payment sector vulnerability
• Trump's proposed 10% credit card rate cap dominates headlines
• Options chain shows aggressive short-term bearish positioning with 345/347.5 call options

Visa's sharp intraday decline has ignited a sector-wide selloff, with the stock trading near its 52-week low of $299. The move follows renewed speculation about President Trump's proposed 10% cap on credit card interest rates, which has rattled investors despite analysts labeling the policy a low-probability risk. With the stock trading below its 200-day moving average and options volatility surging, the market is pricing in significant near-term uncertainty for the payment giant.

Trump's Credit Card Fee Cap Sparks Sector-Wide Panic
The immediate catalyst for Visa's 2.55% intraday drop stems from renewed media coverage of President Trump's proposed 10% cap on credit card interest rates. While analysts have consistently characterized this policy as a low-probability scenario, the mere mention of regulatory intervention has triggered a flight to safety in the payment sector. The proposal directly threatens Visa's and Mastercard's revenue models, which rely on interchange fees from credit card transactions. With the stock trading at 30.9x forward earnings—well below its 52-week high of $375.51—the market is pricing in potential margin compression despite the lack of concrete regulatory action.

Payment Sector in Retreat as Mastercard Trails Visa
Visa's decline mirrors broader weakness in the payment sector, with direct competitor Mastercard (MA) down 2.38% on the same day. The sector's vulnerability is amplified by its exposure to interchange fees, which account for a significant portion of revenue for both companies. While Visa's 30.9x P/E ratio remains above its 52-week average of 34.64x, the stock's 2.55% drop has brought it closer to its 52-week low of $299. The sector's underperformance highlights the market's sensitivity to regulatory overreach risks, particularly in the absence of clear legislative timelines for Trump's proposed policy.

Bearish Options Play: 345/347.5 Calls and 200D MA Watch
• 200-day average: 345.34 (above current price)
• RSI: 55.13 (neutral territory)
• MACD: 4.08 (signal line 4.47, bearish crossover)
• Bollinger Bands: 342.58 (lower band) vs. 358.96 (upper band)
• 30D support: 326.37–327.00

Visa's technical profile suggests a short-term bearish bias, with the stock trading below its 200-day moving average and RSI hovering near neutral levels. The most compelling options plays are the V20260116C345 and V20260116C347.5 call options, which offer high leverage and liquidity. The V20260116C345 call (strike $345, expiration 1/16) has a 23.36% implied volatility, 186.84% leverage ratio, and 3.79% gamma, making it ideal for a moderate bearish move. The V20260116C347.5 call (strike $347.5, expiration 1/16) offers 23.45% IV, 285.76% leverage, and 3.21% gamma, positioning it for sharper downside scenarios. Under a 5% downside scenario (targeting $323.82), the V20260116C345 would yield a 162% return, while the V20260116C347.5 would deliver 276% gains. Aggressive bulls may consider a short-term bearish play into a bounce above $345, with the 200-day MA at $345.34 serving as a critical psychological level.

Backtest Visa Stock Performance
The backtest of Visa's (V) performance after an intraday plunge of at least -3% from 2022 to the present shows favorable short-to-medium-term gains. The 3-Day win rate is 53.71%, the 10-Day win rate is 55.90%, and the 30-Day win rate is 59.83%, indicating a higher probability of positive returns in the immediate aftermath of such events. The maximum return during the backtest was 3.76%, which occurred on day 59, suggesting that while the gains may not be substantial, they can still lead to positive outcomes with a moderate time horizon.

Regulatory Risk Overshadows Fundamentals—Watch for 200D MA Breakdown
Visa's sharp decline reflects the market's overreaction to speculative regulatory risks rather than concrete earnings deterioration. While the stock's 30.9x P/E ratio remains attractive relative to its 52-week average, the near-term outlook hinges on the trajectory of Trump's credit card fee cap proposal. Investors should monitor the 200-day moving average at $345.34 as a key inflection point—if the stock breaks below this level, the 345/347.5 call options could deliver outsized returns. Sector peers like Mastercard (-2.38% intraday) also warrant attention, as coordinated regulatory action could amplify the selloff. For now, the 345/347.5 call options offer a high-leverage, high-liquidity play on a potential 5% downside scenario.