To The Moon

The reason why I would like to look at $SoFi Technologies Inc.(SOFI)$ is because this stock seem to be trapped in consolidation for a very long time, and the other fundamental reasons are its valuation at around 27 and below mean that it is trading at a 1.1 PEG and it price to sales remains in the mid 7s,

And SOFI is expanding their operating and net margins and their growth for the next few years, this kind of stock would be an attractive opportunity to me, so in this article I would like to share how I would like to play bull put spread on SOFI with expiration on 09 Jan 2026.

Beautiful Monthly Uptrend

We are seeing SOFI is now on a beautiful monthly uptrend and it has just been looking to set some monthly higher lows into the 2021 highs which was 25 down to 22. And here we have the exact same support range which was previous resistance should be current support right now.

Bull Put Spread Strategy Overview

A bull put spread (also called a put credit spread) is a limited-risk, limited-reward options strategy used when a trader has a moderately bullish or neutral outlook on the underlying. The structure for our trade would be:

• Sell 1 SOFI Jan 9 2026 26 put

• Buy 1 SOFI Jan 9 2026 25 put

Both legs share the same expiration date but different strike prices. We receive a net credit upfront (premium from the sold put minus premium paid for the bought put).

Key features:

• Maximum profit: Net credit received (kept if price ≥ short strike at expiration).

• Maximum loss: (Difference in strike prices – net credit) × 100.

• Risk profile: Loss limited and known upfront.

• Breakeven: Short strike — net credit received.

Payoff Mechanics for 26/25 Spread

Outcome at ExpirationSOFI PriceP/L Outcome

Best case: both puts expire worthless≥ $26 - Keep net premium; max profit

Breakeven:= $26 − net creditZero net gain/loss

Worst case: stock < $25≤ $25Maximum loss: Strike width − credit

• Strike width: $1

• Risk per contract: $100 maximum before credit.

• Profit zone: stock stays at or above $26 by 09 Jan 2026 expiry.

The exact net credit and resulting breakeven depend on current option premiums at execution. This spread benefits from time decay and is typically more profitable if implied volatility falls as expiration approaches.

Market Context for SOFI

SOFI’s stock price environment:

• As of the most recent data, SOFI is trading near $26–27 (intraday range).

• Options with expiration early January 2026 are active, including the $25 put strike showing bid premiums near ~$0.97 (approx on some chains).

The expected move for this Friday is about 26. The expected move for January 9th is about 25.25.

Volatility and sentiment:

• SOFI historically shows elevated implied volatility (IV) relative to many stocks, which increases premium income but also reflects uncertainty.

• Some recent options market data indicates both bullish skew and mixed sentiment depending on timeframe and put/call activity.

• Recent corporate action (e.g., a $1.5 billion share offering) weighed on the stock and may contribute to volatility.

SOFI implied volatility (IV) is 52.9, which is in the 16% percentile rank. This means that 16% of the time the IV was lower in the last year than the current level. The current IV (52.9) is -4.1% below its 20 day moving average (55.2) indicating implied volatility is trending lower.

Analyst views and valuation considerations:

• Historical coverage has shown mixed analyst sentiment, with some downgrades over valuation concerns and others focusing on growth metrics.

Bull Put Spread Pros and Cons

Advantages

1. Limited Risk and Defined Loss: The worst possible loss is the strike difference minus credit received.

2. Profit from Neutral to Up Movement: You do not need SOFI to surge; holding above the short strike is sufficient.

3. Time Decay Works in Your Favor: As expiration approaches, if the stock stays above the short strike, premium erodes benefiting your position

Drawbacks / Risks

1. Cap on Profit: Profit is fixed to the net credit you receive, which could be small relative to risk.

2. Assignment Risk: If SOFI closes below $26 before expiration, assignment on the short put may occur.

3. Directional Risk: If the stock slides materially below $25, the spread suffers maximum loss. This risk is meaningful given SOFI’s volatility.

Risk-Reward Considerations

For a typical bull put spread with a $1 width:

• Max Profit: ≈ net credit (e.g., if credit is $0.30, profit ≈ $30).

• Max Loss: $100 − net credit (e.g., $100 − $30 = $70).

• Risk/Reward: Varies with premium; typically reward < risk on a single contract basis.

This means the strategy generally expects a high probability of a smaller gain rather than a low-probability large gain.

Probability & Timing Factors

• Time to expiration: ~10 days into 2026 gives the stock time to see movement from macro or company-specific catalysts (earnings, macroeconomic news).

• Implied volatility: Elevated IV increases premiums (better credit) but also the chance of larger price swings.

• Event risk: Any catalysts (earnings, macro announcements) before 09 Jan 2026 can significantly affect outcome. We are expecting the December Jobs report around that time.

Execution and Management Tips

If we choose to implement the spread:

Entry Execution:

• Confirm bid-ask spreads and liquidity at the 26 and 25 strikes.

• Ensure the net credit is consistent with your required risk/reward.

Trade Management:

• Consider rolling or closing early if the stock moves strongly upward (capture profit) or downward (limit loss).

• Monitor IV changes; volatility contraction benefits the spread after entry.

Position Sizing:

• Determine risk tolerance — the spread has a capped loss per contract (~$100 net risk before premium).

• Adjust position size to fit risk limits (e.g., 1–3% of trading capital risk).

Recommendation Framework

Bullish to Neutral Outlook: Suitable if we anticipate the stock will stay at or above $26 through January 9, 2026 (nightly closes included).

Profit Likelihood: Higher if the stock remains above breakeven; limited upside relative to risk.

Key Condition to Watch: If SOFI falls materially below the strike width before expiration (e.g., < $25.00), consider exiting or adjusting due to rising loss potential.

Summary

I am doing a Credit Spread strategy where we are betting that SoFi stock will stay above $26.00 through expiration.

1. The "Moneyness" Context

• Current Price: ~$26.82 (as of Dec 31, 2025).

• Position Status: Out-of-the-Money (OTM).

• The strikes you selected ($26 short / $25 long) are currently below the stock price. This is the ideal setup for a Bull Put Spread, as the options currently have no intrinsic value. We essentially have an $0.82 cushion (approx. 3%) against a downward move.

2. Risk & Reward Profile

• Max Profit: Limited to the Net Credit received upfront. You keep 100% of this profit if SOFI closes above $26.00 on Jan 9.

• Max Loss: Limited to the width of the spread ($1.00) minus the credit received. This occurs if SOFI falls below $25.00.

• Breakeven: $26.00 minus the credit received.

3. Critical Risk Factor: Macro Events

• Expiration Day Volatility: The expiration date (Jan 9, 2026) coincides with the release of the December Jobs Report. This is a major economic event that often causes pre-market volatility.

• While you are safe from company-specific earnings (projected for late Jan), a weak jobs report could trigger a market-wide selloff that challenges your $26 strike right at the finish line.

This is a high-probability income trade benefiting from Theta (time decay). With only ~9 days to expiration, the time value of these options will erode quickly, benefiting you. However, you must monitor the $26 support level closely, particularly due to the volatility expected from the Jan 9 economic data release.

Appreciate if you could share your thoughts in the comment section whether you think a credit spread for SoFi on 09 Jan which coincide with Dec Jobs report would be appropriate.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire @MillionaireTiger appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.