AFRM Plunges 7.1%: Is This a Buying Opportunity or a Warning Sign?

Summary
• Affirm Holdings (AFRM) tumbles 7.09% intraday to $82.19, its lowest since March 2025
• Intraday range of $81.90–$86.22 highlights sharp volatility amid Klarna’s IPO announcement
• Turnover surges to 11.3M shares, 4.2% of float, signaling intense short-term positioning
• Sector leader Upstart (UPST) also declines 5.3%, amplifying fintech sector jitters

Today’s selloff in Affirm Holdings has sent shockwaves through the buy-now-pay-later (BNPL) sector, with the stock collapsing 7.09% to $82.19. The move follows Klarna’s $1.27B IPO announcement, intensifying competition and sparking valuation concerns. With a 34% revenue growth over the past year but a P/S ratio of 9.4, investors are now weighing whether this is a panic-driven entry or a warning of overvaluation.

Klarna’s IPO Sparks Fintech Sector Jitters
Affirm’s 7.09% intraday drop is directly tied to Klarna’s $1.27B IPO announcement, which positions the Swedish BNPL giant as a direct competitor. The IPO signals a new wave of capital and scale for Klarna, threatening Affirm’s market share in a sector already grappling with thin margins. Affirm’s P/S ratio of 9.4—well above the S&P 500’s 3.3—now faces scrutiny as investors reassess its premium valuation. The stock’s recent 40% YTD surge, fueled by Q2 earnings and a $0.20 GAAP profit, has created a valuation gap that Klarna’s entry may widen.

Consumer Finance Sector Under Pressure as UPST Leads Decline
The consumer finance sector is broadly under pressure, with sector leader Upstart (UPST) down 5.3% on the day. Both Affirm and Upstart operate in the BNPL and fintech lending space, where competition is intensifying. While Affirm’s revenue growth (34% YoY) outpaces the S&P 500’s 5.3%, its 1.6% net margin lags behind the S&P 500’s 12.7%. The sector’s vulnerability to interest rate cuts and economic downturns—evidenced by Affirm’s 94.7% peak-to-trough drop during the 2022 inflation shock—adds to near-term risks.

Options Playbook: Capitalizing on Volatility with AFRM20250912P80 and AFRM20250912C82
• 200-day MA: $60.77 (well below current price)
• RSI: 73.28 (overbought territory)
• MACD: 3.26 (bullish divergence)
• Bollinger Bands: Price at 82.19, 4.7% above lower band (70.04)
• Support/Resistance: 30D support at $65.43, 200D support at $65.27

Affirm’s technicals suggest a short-term bearish bias despite a long-term bullish trend. The stock is testing its 200-day MA ($60.77) and faces critical support at $65.27. For options traders, the AFRM20250912P80 put and AFRM20250912C82 call offer strategic leverage. The put has a 60.49% implied volatility ratio and 34.68% leverage, while the call’s 58.64% IV and 23.62% leverage align with a bearish-to-neutral outlook.

• AFRM20250912P80 (Put): Strike $80, Expiry 9/12, IV 60.49%, Leverage 34.68%, Delta -0.3738, Theta -0.0214, Gamma 0.0439, Turnover 71,955
- High IV and leverage amplify downside potential; delta suggests moderate sensitivity to price moves
- Payoff at 5% downside (78.08): $1.92 per contract
• AFRM20250912C82 (Call): Strike $82, Expiry 9/12, IV 58.64%, Leverage 23.62%, Delta 0.5343, Theta -0.3067, Gamma 0.0475, Turnover 210,434
- Strong liquidity and moderate delta for directional bets; theta decay favors short-term holding
- Payoff at 5% downside: $0.00 (strike above current price)

Aggressive bulls may consider AFRM20250912C82 into a bounce above $85, while bears should target AFRM20250912P80 if $80 breaks. The 9/12 expiry offers a tight window to capitalize on near-term volatility.

Backtest Affirm Holdings Stock Performance

AFRM at Crossroads: Watch $80 Support and Sector Sentiment
Affirm’s 7.09% drop has exposed valuation cracks in a stock that once traded at 52-week highs. While technicals suggest a short-term bearish bias, the long-term bullish trend remains intact. Investors should monitor the $80 level—breaking below this could trigger a retest of the 200-day MA at $60.77. The sector leader, Upstart (UPST), is also down 5.3%, signaling broader fintech jitters. For now, the AFRM20250912P80 put offers a high-leverage hedge against further declines, while the C82 call provides a directional play if the stock stabilizes. Watch for $80 breakdown or regulatory reaction to Klarna’s IPO as key catalysts.