SoFi Technologies, Inc. provides financial services across the US, Latin America, Canada, and Hong Kong through its Lending, Technology Platform, and Financial Services segments. The company trades on Nasdaq under the ticker “SOFI.” Since its low in December 2022, SoFi’s price has increased five times. The high reached $28.26 in early 2021, before dropping to a low of $4.24 in December 2022. The recent price rise fits within an expected upward pattern. Elliott Wave analysis predicts a rally starting from a low in April 2025. The current price movement suggests a correction within wave ((iv)), and we anticipate a rise afterward. Trading in the Forex market carries high risks, and results are not guaranteed. Investors must carefully assess their goals, experience, and risk tolerance before proceeding. Never invest money you cannot afford to lose. This analysis is for informational purposes only and should not be seen as investment advice. Previous performance does not guarantee future results, and all trading involves risks. All content is protected by copyright and not meant for unauthorized sharing. The current market correction, viewed as wave ((iv)), presents opportunities for derivative traders. Despite SoFi achieving its second consecutive quarter of GAAP profitability, the stock’s recent decline indicates that the weakness may be more technical than a fundamental issue. In the near term, as the correction unfolds, we can consider selling cash-secured puts with strike prices around or below recent support levels, possibly near $6.00. The stock’s high implied volatility, recently above 60%, offers attractive premiums for this strategy, allowing traders to earn while waiting for a better entry point. Looking ahead to the expected rise, buying long-dated call options is a sensible response. To benefit fully from the rally projected from the April 2025 low, we should target expirations in late 2025 or January 2026. This strategy helps manage the risk associated with accurately timing the market bottom. We must also account for the broader market situation, as CEO Noto mentioned the challenges posed by the current interest rate environment. If the Federal Reserve maintains high rates for an extended period, it could hinder the financial services sector and postpone the next upward wave. This economic pressure implies we might experience a corrective phase before a significant advance. The company’s high short interest, around 18% of the free float, adds another consideration. This situation could lead to a short squeeze triggered by any positive news, resulting in a swift upward price movement. A bull call spread might effectively position us for such a scenario while keeping risk defined. Reflecting on the five distinct upward movements since the low in 2022, each has been followed by a notable pullback. This historical pattern suggests that once the next rally starts, it may be wise to sell covered calls against core stock holdings. This strategy allows for income generation during the price increase, aligning with the stock’s volatile behavior.

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