Carvana's 12.8% Plunge: Record Earnings Clash with Market Turbulence

Summary
• Carvana reports record 156k retail units and $5.65B revenue in Q3 2025
• Net income surges to $263M, Adjusted EBITDA hits $637M
• CVNA shares plunge 12.8% intraday to $308.605, trading below 52W low of $148.25

Carvana’s stock faces a dramatic intraday selloff despite record financial results, with the stock trading 12.8% below its previous close. The sharp decline contrasts with the company’s industry-leading growth metrics and bullish Q4 guidance, raising questions about market sentiment amid broader sector pressures and technical indicators signaling potential volatility.

Earnings Optimism vs. Market Volatility
Carvana’s Q3 results—driven by 44% YoY retail unit growth and $5.65B in revenue—should have bolstered investor confidence. However, the stock’s 12.8% intraday drop suggests profit-taking after its 78% YTD rally, compounded by sector-wide jitters. The 52W high of $413.335 remains distant, and the 200-day moving average at $296.36 offers limited support. Elevated implied volatility (62–75% across options) and a bearish MACD crossover (-4.18 vs. -5.71 signal line) indicate short-term uncertainty, despite the company’s strong fundamentals.

Auto Retail Sector Under Pressure as Carvana Dips
The auto retail sector, led by Carmax (KMX), faces headwinds from Trump-era tariffs and shifting EV demand. KMX’s -0.18% intraday decline mirrors CVNA’s selloff, reflecting broader macroeconomic anxieties. While Carvana’s vertical integration model outperforms peers in margins (11.3% Adjusted EBITDA), sector-wide challenges—such as inventory bottlenecks and regulatory uncertainty—weigh on investor sentiment. The sector’s 7.8% turnover rate underscores liquidity concerns, with Carvana’s 10M+ shares traded amplifying volatility.

Options Playbook: Capitalizing on CVNA's Volatility
• 200-day average: $296.36 (below current price)
• RSI: 48.24 (neutral)
• MACD: -4.18 (bearish crossover)
• Bollinger Bands: $319.59 (lower) to $386.76 (upper)

Carvana’s technicals suggest a pivotal juncture. The stock trades near its 200-day MA and within the lower Bollinger Band, signaling potential for a rebound or further decline. Key levels to watch: $319.59 (support) and $386.76 (resistance). The 7.8% turnover rate and 66–75% IV across options highlight liquidity and volatility opportunities.

Top Options Picks:
1. CVNA20251107P300 (Put):
• Strike: $300, Expiration: 2025-11-07
• IV: 62.47% (moderate), Leverage: 36.28% (high), Delta: -0.38 (moderate), Theta: -0.069 (high decay), Gamma: 0.0126 (sensitive to price swings), Turnover: 1.13M (liquid)
• Payoff (5% downside): $308.605 → $293.17 → $16.83 profit per contract. This put offers high leverage and liquidity for a bearish bet, with gamma and theta amplifying gains if the stock breaks below $300.

2. CVNA20251107C300 (Call):
• Strike: $300, Expiration: 2025-11-07
• IV: 72.29% (high), Leverage: 17.21% (moderate), Delta: 0.61 (moderate), Theta: -1.51 (high decay), Gamma: 0.011 (moderate sensitivity), Turnover: 78.5K (liquid)
• Payoff (5% upside): $308.605 → $324.03 → $24.03 profit per contract. This call suits aggressive bulls expecting a rebound above $300, with high IV and moderate delta balancing risk and reward.

Trading Insight: Aggressive short-sellers may target CVNA20251107P300 if $300 breaks, while bulls should watch for a bounce above $319.59. Liquid options and elevated IV create a fertile ground for directional plays.

Backtest Carvana Stock Performance
Below is an interactive event-study dashboard summarising how Carvana (CVNA.N) has historically traded after any single-day intraday plunge of 13% or more (Jan-2022 → 30-Oct-2025). Please explore the chart for cumulative returns, win-rate curves and optimal holding-period insights.Key analytical takeaways (concise):• Sample size: 25 plunge events. • Average path: price tends to stabilise for ~3 days, then shows a recover-and-outperform pattern; peak out-performance ~Day 17-20 (+22 pct vs +9 pct benchmark). • Win-rate improves from 48 % on Day 1 to >70 % from Day 7 onward. • Statistical significance not strong at 5 % level, but consistency of positive skew after the first trading week is notable. Feel free to drill down in the module for cumulative P&L charts, event-aligned candlesticks and per-day stats.

Act Now: CVNA at Pivotal Crossroads
Carvana’s 12.8% selloff, despite record earnings, underscores the fragility of investor sentiment amid sector-wide pressures. The stock’s technicals—bearish MACD, 200-day MA support, and elevated IV—signal a critical juncture. Traders should monitor the $319.59 support level and $386.76 resistance, with options like CVNA20251107P300 offering high-leverage bearish exposure. Meanwhile, Carmax (KMX)’s -0.18% decline highlights sector-wide jitters. A breakdown below $300 could trigger further volatility, making this a pivotal week for CVNA. Watch for $300 support or a rebound above $319.59 to dictate next steps.