AFRM Plummets 4.5% Amid Volatile Intraday Action: What’s Fueling the Selloff?

Summary
• Affirm Holdings (AFRM) trades at $59.34, down 4.53% from its $62.16 open
• Intraday range spans $58.12 to $61.89 amid 1.25% turnover rate
• Sector leader PayPal (PYPL) declines 2.99% as consumer finance faces headwinds
• Options chain shows aggressive put buying at $55–$62 strikes with 57%–140% implied volatility

AFRM’s sharp intraday decline has ignited a frenzy in the options market, with traders scrambling to hedge or capitalize on the downward momentum. The stock’s 4.5% drop has drawn comparisons to broader consumer finance struggles, as PayPal also falters. With technical indicators flashing bearish signals and a volatile options landscape, the question looms: is this a short-term correction or a deeper shift in market sentiment?

Bearish Technicals and Options Volatility Drive AFRM’s Slide
AFRM’s 4.5% intraday drop is driven by a confluence of bearish technical indicators and aggressive put buying. The RSI at 28.55 signals oversold conditions, while the MACD (-3.42) and negative histogram (-1.27) confirm a short-term bearish trend. Bollinger Bands show the stock trading near the lower band at $56.93, with the 200-day moving average (69.06) acting as a distant resistance. Options data reveals heavy put volume at the $55–$62 strikes, with the AFRM20260213P55 put (20.06% leverage ratio) seeing 27.04% price change, indicating institutional bearishness ahead of the February 13 expiration.

Consumer Finance Sector Under Pressure as PayPal Slides
The broader consumer finance sector is experiencing coordinated weakness, with sector leader PayPal (PYPL) down 2.99%. While AFRM’s decline is more pronounced, the sector-wide selloff suggests macroeconomic concerns—such as rising interest rates or shifting consumer spending patterns—are amplifying risk-off sentiment. BofA’s recent credit card restructuring and mixed retail earnings (e.g., Chipotle, Peloton) highlight broader consumer caution, creating a headwind for fintech and buy-now-pay-later platforms like Affirm.

Bearish Options and ETFs to Watch in AFRM’s Volatile Environment
• 200-day average: 69.06 (above current price)
• RSI: 28.55 (oversold)
• MACD: -3.42 (bearish), Histogram: -1.27 (negative divergence)
• Bollinger Bands: Lower band at 56.93 (key support)

AFRM’s technicals and options activity suggest a continuation of the bearish trend. Key levels to monitor include the 200-day MA at $69.06 and the Bollinger Band support at $56.93. The stock’s 60.69 P/E ratio and 1.25% turnover rate indicate limited near-term catalysts for a rebound. While no leveraged ETF data is available, the options chain offers high-leverage bearish plays:

• AFRM20260213P55 (Put):
- Strike: $55, Expiration: 2026-02-13
- IV: 81.18% (high volatility), Leverage: 20.06% (high), Delta: -0.25 (moderate), Theta: -0.057 (slow decay), Gamma: 0.042 (responsive to price moves), Turnover: 7,443 (liquid)
- Payoff at 5% downside: $1.37 (max profit if AFRM drops to $56.37)
- Why it stands out: High leverage and liquidity make this put ideal for capitalizing on a potential breakdown below $56.93.

• AFRM20260213P56 (Put):
- Strike: $56, Expiration: 2026-02-13
- IV: 137.55% (extreme volatility), Leverage: 17.31% (high), Delta: -0.35 (moderate), Theta: -0.148 (rapid decay), Gamma: 0.029 (moderate sensitivity), Turnover: 3,543 (liquid)
- Payoff at 5% downside: $0.37 (profit if AFRM falls to $56.37)
- Why it stands out: Aggressive volatility and moderate delta position this as a high-reward, high-risk play for a sharp selloff.

Hook: If AFRM breaks below $56.93, the AFRM20260213P55 put offers a high-leverage bearish bet with defined risk.

Backtest Affirm Holdings Stock Performance
The backtest of AFRM's performance after an intraday plunge of -5% from 2022 to the present shows favorable short-to-medium-term gains. The 3-day win rate is 50.20%, the 10-day win rate is 50.00%, and the 30-day win rate is 53.71%, indicating a higher probability of positive returns in the immediate aftermath of the plunge. The maximum return during the backtest was 13.98% over 30 days, suggesting that AFRM has the potential for recovery and even exceed pre-plunge levels.

AFRM’s Bearish Momentum Intensifies: Key Levels to Watch Now
AFRM’s 4.5% intraday drop reflects a deepening bearish technical bias, with oversold RSI and bearish MACD confirming the downward trend. The options market’s aggressive put buying—particularly at the $55–$62 strikes—suggests institutional bearishness ahead of the February 13 expiration. While the 200-day MA at $69.06 remains a distant resistance, the immediate focus is on the Bollinger Band support at $56.93. Sector leader PayPal’s 2.99% decline underscores broader consumer finance fragility. Action: Monitor the $56.93 support level and watch for a breakdown below $55 to confirm a deeper bearish phase. Aggressive traders may consider the AFRM20260213P55 put for high-leverage exposure to a potential selloff.