Affirm Holdings Surges 8% Amid Frenetic Bullish Momentum—What's Fueling the Move?

Summary
• AFRM rockets to $71.72, up 7.99% in 2025-08-04 trading
• Intraday high of $71.96 vs. 52-week low of $24.67
• Options frenzy: 242,962 shares traded, 70–800+ contracts active

Affirm Holdings (AFRM) is experiencing a meteoric rise, surging over 7.99% in a single trading session. The stock’s sharp move from $67.60 to $71.96 has ignited a frenzy in the options market, with over 200,000 shares traded and multiple high-leverage call options seeing explosive volume. This volatility aligns with a broader market narrative of speculative fervor in high-growth fintechs, despite a bearish 52-week range of $24.67–$82.53 and a -1017x dynamic P/E ratio.

Surge Driven by Short-Sellers' Panic and Gamma Squeeze Dynamics
AFRM’s 8% rally is fueled by a classic short-covering and gamma squeeze scenario. Options data reveals 754 contracts for the $72 call (AFRM20250808C72) with 248.98% price change ratio and 56.65% implied volatility, alongside 70–800+ volume in $70–$75 strikes. Short-sellers, cornered by the stock’s breakout above key resistance clusters (Bollinger Upper at $70.77 and 30D MA at $67.02), are scrambling to unwind positions. The 30D support/resistance zone at $69.02–$69.21 further amplifies this dynamic, creating a self-fulfilling bullish spiral as algorithmic gamma hedging amplifies buying pressure.

High-Volatility Options Playbook: Gamma-Driven Call Spreads and Theta Harvesting
• Technical Indicators:
- 200D MA: $57.55 (below current price)
- RSI: 57.47 (neutral)
- MACD: 1.09 (bullish divergence)
- Bollinger Bands: $63.79–$70.77 (breakout confirmed)

Trading Setup: AFRM’s $72 call (AFRM20250808C72) and $73 call (AFRM20250808C73) are top contenders. The $72 strike offers 41.85% leverage with 56.65% IV and 0.48 delta, while the $73 call provides 57.26% leverage, 55.20% IV, and 0.39 delta. Both exhibit strong gamma (0.0839–0.0833) and theta (0.4657–0.4070), indicating robust short-term payoff potential.

Top Options:
- AFRM20250808C72:
• Strike: $72
• Expiry: 2025-08-08
• IV: 56.65% (mid-range)
• Leverage: 41.85% (high)
• Delta: 0.48 (moderate)
• Theta: -0.4657 (high time decay)
• Gamma: 0.0839 (high sensitivity)
• Turnover: $77,220 (liquid)
• Payoff at 5% upside: $75.31 → $3.31/share gain
• Ideal for aggressive bulls capitalizing on gamma-driven acceleration

- AFRM20250808C73:
• Strike: $73
• Expiry: 2025-08-08
• IV: 55.20% (mid-range)
• Leverage: 57.26% (very high)
• Delta: 0.39 (moderate)
• Theta: -0.4070 (high time decay)
• Gamma: 0.0833 (high sensitivity)
• Turnover: $47,890 (liquid)
• Payoff at 5% upside: $75.31 → $2.31/share gain
• Best for directional bets with leveraged exposure to continued momentum

Action: AFRM20250808C72 is a prime candidate for a bullish calendar spread, while AFRM20250808C73 offers amplified exposure for those expecting a break above $73. Monitor 30D support at $69.02 and 200D resistance at $68.31 for trend confirmation.

Backtest Affirm Holdings Stock Performance
The backtest of AFRM's performance after an intraday surge of 8% indicates positive short-to-medium-term gains, with the 3-Day win rate at 51.66%, the 10-Day win rate at 50.18%, and the 30-Day win rate at 50.00%. The maximum return observed was 9.03% over 30 days, suggesting that while there is some volatility, AFRM can maintain gains in the aftermath of such a significant intraday move.

Bullish Breakout Confirmed—Act Now on Gamma-Driven Call Spreads
AFRM’s 8% surge has solidified a short-term bullish trend, with key resistance at $73 and support at $68.31. The stock’s MACD divergence and Bollinger breakout suggest momentum is intact, but traders must watch for 200D MA retesting. Alpha Pro Tech (APT), the sector leader, fell 2.10% today, highlighting divergent sector dynamics. Immediate action: Buy AFRM20250808C72 for gamma-driven acceleration or AFRM20250808C73 for leveraged exposure. If $73 breaks, AFRM20250808C73 becomes a high-conviction trade.