Affirm Options Activity Surges as Traders Bet on Continued Post-Earnings Rally

Options activity in Affirm Holdings (AFRM) surged Monday, signaling strong conviction from traders that the stock's recent earnings-driven rally has further to run. Shares in the buy-now-pay-later firm jumped more than 9% to $84.48 after it posted better-than-expected quarterly results.

Bullish Bets Dominate the Market

By mid-morning, total options volume in Affirm reached 60,718 contracts, with bullish call options outnumbering bearish put options by a nearly 3-to-1 margin, according to market data. Call volume alone hit 44,136 contracts, its highest level since November of the previous year.

Traders focused heavily on short-term, out-of-the-money call strikes, suggesting speculation on continued upward momentum before expiration. The most active contracts included:

• The $90 strike call, with volume of 4,475 contracts traded against open interest of just 1,778.
• The $87 strike call, which saw 2,423 contracts change hands versus open interest of 2,019.

The high volume relative to existing open interest indicates that traders were opening fresh bullish positions rather than closing out old ones.

Volatility Drops as Uncertainty Fades

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Despite the flurry of bullish activity, 3-month implied volatility—a measure of expected future price swings—fell sharply by 6.5 points to 56.6%. This decline suggests that the market now sees less risk and uncertainty surrounding the stock after the company's earnings announcement is in the past.

At the same time, the options skew, which compares the price of bullish calls to bearish puts, ticked up slightly. This indicates that demand for upside exposure remains robust, with traders willing to pay a premium for contracts that would profit from a continued share price increase.

Context: Strong Growth vs. Credit Concerns

The rally was sparked by a significant earnings beat, where Affirm reported Q4 earnings per share of $4.62, far exceeding the consensus estimate of $0.85. The company also reported that its direct-to-consumer card volume grew 146% year-over-year.

However, some analysts have flagged potential risks on the horizon. A recent note from BTIG highlighted record-high delinquencies in Affirm's newest asset-backed securities, pointing to a potential rise in credit risk that investors will be monitoring closely.