To The Moon

Mathematical Money | October 4, 2026

$SOFI$ closed Friday at $15.77. Its 52-week low is $15.15, so it's sitting about four percent above the worst price it has traded in a year, and roughly 51% below the $32.21 it reached last November.

Over the same stretch the business has been growing at 40%. That gap is the entire reason I own it, and this post is mostly about how I've structured the position rather than why I like the company — because the structure is the part people rarely explain.

What the business actually did

Second quarter, reported at the end of July. Adjusted net revenue of $1.21 billion, up 40% year on year, with total net revenue up 43%. Earnings of $0.12 a share against a $0.11 consensus.

Underneath that, the numbers I care more about. Loan originations hit $14.8 billion, a record quarter and up 18% on the prior three months. Deposits reached $45.5 billion, having grown $5.3 billion inside the quarter and 13% over the year. Net interest income was $249 million, up 29%, and net interest margin held at 5.98%, up four basis points sequentially.

Net income came in at $157 million on a 13% margin. For a company that spent years being described as a growth story with no profits, that is a meaningfully different set of accounts.

Deposits are the bit I'd point at. A lender that funds itself with sticky customer deposits has a structurally cheaper cost of funds than one borrowing wholesale, and that advantage compounds quietly. $5.3 billion of deposit growth in ninety days is not a marketing number.

The September development most people missed

On 22 September, SoFi moved its entire card programme onto stablecoin settlement rails with Mastercard — around $25 billion of annualised volume, settled using its own dollar-pegged token through SoFi Bank.

It is the first national bank to settle card transactions this way on Mastercard's network, which is a genuinely unusual thing for a company this size to have got to first.

I'd separate what that is from what it isn't. It isn't revenue today and nobody should model it as such. What it is, is infrastructure going live at genuine scale rather than a pilot with a press release, and it gives SoFi a position in payment rails that most consumer fintechs can only talk about. Whether that converts into margin is a 2027 and 2028 question.

The chart disagrees with all of this

I'd rather be blunt here than sell you something. SoFi trades below its 20-day, 50-day, 100-day and 200-day averages. The 200-day sits almost 17% above the current price. It's 51% below its November high and, as noted, four percent off a 52-week low. On any technical reading this is a stock in a downtrend that has not yet stopped going down.

Sixty-day volatility is running around 52%, so a 20% month here is unremarkable rather than alarming. The honest summary is that the business is compounding and the share price has spent a year disagreeing. One of those will turn out to have been right, and the chart has been right so far.

The bear case I take seriously

Three things, and none of them are nothing. The valuation is genuinely demanding on trailing numbers — around 131 times trailing earnings on $0.12. The bull answer is that 40% forward growth deserves a forward multiple of 25 to 30 times, which is fair as far as it goes, but it does mean you're paying for execution that hasn't happened yet.

There was insider selling. The CTO sold 18,624 shares at $17.50 on 21 September, with no buyback announced to offset the signal. One executive trimming is not a thesis-breaker and people sell shares for all sorts of reasons, but it's a data point going the wrong way and I'd rather mention it than have someone else do it for me.

And the market is pricing below my own base case. My base scenario for the next twelve months is $18 to $24, with a bear case of $11 to $16. At $15.77 the stock is trading inside the bear range. The market has looked at the same company and reached a more pessimistic conclusion than I have.

Why I'm positioned the way I am

Here's the part I actually wanted to write about, because it's where most explanations stop. I don't own the shares. I own call options struck at $13, expiring September 2027 — deep in the money, so most of what I paid is intrinsic value rather than time premium. A deep in-the-money call moves close to dollar-for-dollar with the stock, which means the position behaves much like owning it while tying up materially less capital.

The expiry is the deliberate part. September 2027 gives the business four more quarterly reports and the better part of two years to either convert that deposit and origination growth into earnings, or fail to. A six-month option would be a bet on sentiment turning; this is a bet on the accounts eventually mattering, and those take time to show up.

Against that, I've written short calls at $18 expiring in three weeks, on roughly a third of the position.

The $18 strike was chosen for a specific reason: it's where the 50-day average sits, and it's the bottom of my base-case range. It's the first level the stock has to reclaim for a recovery to look real. So I'm renting out the move from here up to the first genuine resistance, and keeping everything above it.

Two details matter more than people assume. First, those short calls expire in three weeks, not in 2027 — so I'm capping October, not capping the thesis. If the stock runs to $22 next spring, the position participates fully, because by then those contracts will be long gone. Second, I've only written against about a third of the long position, so even inside those three weeks two-thirds of it is uncapped.

The whole structure is designed around a simple observation: I think this takes a while, and I'd rather be paid something each month while waiting than sit in a position that only costs me time value.

For what it's worth, the long calls are currently down about 17%. The structure doesn't make you right — it just changes what being early costs you.

What would change my mind

27 October, when the third quarter lands, and the thing I'll be reading isn't the revenue line. It's whether deposits kept growing at anything like $5 billion a quarter, and whether net interest margin held near 6%.

If deposit growth stalls, the cheap-funding advantage that underwrites the whole case stops compounding, and the valuation stops being defensible on any time frame. That would do more damage to my thesis than another 20% off the share price.

Two things I'd like other views on.

Does anyone else buy deep in-the-money LEAPS instead of shares on names they expect to take years? I find the capital efficiency compelling and the lack of dividends irrelevant on a company like this, but I'd be curious whether people think the time premium is worth it.

And on the short calls — would you write against a third of a position, or all of it? Writing against everything collects more and caps everything, and I've never settled on whether partial coverage is clever or just indecisive.

#fintech #options #LEAPS #coveredcalls #banking

Stop guessing. Start calculating.

Live to fight another day. 🤙