🎯$Affirm Holdings, Inc. (AFRM) Options Strategy: Bull Call Spread
- Underlying: AFRM
- View: Cautious Optimism / Short-term oversold bounce
- Strategy Type: Debit Spread (Directional, Bullish)
- Option Contract Portfolio:
- Buy 1 AFRM 19 May 2026 $65.00 Call @ $5.175 (Mid)
- Sell 1 AFRM 19 May 2026 $70.00 Call @ $3.225 (Mid)
- Max Gain & Loss: Max Gain = ($70 - $65) - Net Debit = $5 - $1.95 = $3.05 per spread; Max Loss = Net Debit = $1.95 per spread.
- Initial Cost/Credit: Net Debit = $5.175 - $3.225 = $1.95 per spread.
- Greek Exposure (Simulated):
- Delta: ~+0.35 (Moderate positive directional exposure)
- Theta: ~-0.02 (Slight daily time decay cost)
- Vega: ~-0.08 (Slightly negative, benefiting from a decrease in high IV)
- Gamma: ~0.05 (Moderate)
- Rho: ~0.01 (Low)
- Rationale: This strategy aligns perfectly with a "cautious optimism" view. It provides leveraged upside exposure to the anticipated bounce towards the $70 resistance level, while capping the maximum risk with a defined cost. The short $70 call helps finance the long call, reducing the initial investment and creating a positive Theta profile relative to a naked long call. It is a capital-efficient way to express a bullish view in a high-IV environment, as the net Vega is slightly negative, offering a hedge against a potential decline in implied volatility.
- Time Frame: Short-Term (3 weeks to expiry).
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