AFRM had its best day in three years, surging 32% after an earnings beat! One savvy investor turned the earnings wave and options strategy into a whopping $15,467 profit!
Curious about the strategy? Let’s find out!
👏👏👏 Congratulations to @ljw2000 for $15467 scoring a $15,467 return by buying AFRM calls!
Got some valuable trading tips? Don’t keep them to yourself—share your insights in the comments below! 💡
When you're bullish on a stock, there are generally three ways to play it:
1️⃣ Buy the stock and wait for it to rise.
2️⃣ Sell puts, betting the stock won’t drop, and collect the premium.
3️⃣ Buy calls, as our investor did.
Today, let’s dive into how buying calls can pay off during earnings season.
In this case, the investor purchased AFRM call options with a strike price of $40, expiring on 2024-10-18, just before the earnings report.
After AFRM’s stellar earnings release, the stock price soared to $41.66, a 31.92% increase. Since the stock price exceeded the strike price, the option became profitable.
The beauty of buying call options? You pay a premium to buy the call, and that’s the maximum you can lose. However, call options typically become profitable during significant price jumps.
Back to AFRM:
$Affirm Holdings, Inc.(AFRM)$ crushed profit expectations and forecasted positive GAAP operating income, driven by a 48% year-over-year sales surge in its Buy Now Pay Later platform.
The fintech’s $659M in Q4 2024 sales and $7.2B in Gross Merchandise Volume underline the strong demand for credit card alternatives and robust interest income growth.
Affirm’s sales forecast of $640M-$670M for Q1 2025 outpaces Wall Street expectations, with a market valuation reflecting a reasonable 3.6x sales multiple.
And with lower interest rates potentially boosting Buy Now Pay Later demand even further, Affirm’s growth trajectory looks promising.
Do you believe in the future of Buy Now Pay Later?
What’s your target price for AFRM? 🚀
🎁Rewards：
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Comments
For its near term target price, I would say around 52.48 USD which was its previous recent high. It should breakout this resistance first before we expect further surge ahead.
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Great article, would you like to share it?