FIG Complex Multi-Leg Strategy - $12.8M Hedging Play Before Earnings!

📅 October 16, 2025 | 🔥 Unusual Activity Detected

📊 Company Overview

Figma, Inc. (FIG) is a browser-based design and product development platform that has revolutionized collaborative digital design:
- Market Cap: $31.26 Billion
- Sector: Software & Services (Prepackaged Software - SIC 7372)
- IPO Date: July 31, 2025 (recent IPO at $33/share)
- Primary Business: Subscription-based browser design platform enabling teams to collaborate across the entire product development lifecycle, serving 95% of Fortune 500 companies with 13 million monthly active users

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🎯 The Quick Take

A sophisticated trader just deployed a $12.8M multi-leg options strategy on Figma (FIG) at 14:29:12 PM today! This complex position combines near-term downside protection with longer-term bullish exposure, perfectly timed ahead of Q3 earnings on November 5th and lock-up expiration on November 7th. Translation: Smart money is hedging against immediate volatility while maintaining upside through the critical earnings window.

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💰 The Option Flow Breakdown

📊 What Just Happened

The Tape (October 16, 2025 @ 14:29:12):

Time	Symbol	Side	Buy/Sell	Type	Expiration	Premium	Strike	Volume	OI	Size	Spot	Option Price
14:29:12	FIG	MID	SELL	PUT $53	2025-10-24	$2.5M	$53	19K	203	19,000	$58.38	$1.30
14:29:12	FIG	MID	BUY	PUT $61	2025-10-17	$6.2M	$61	20K	20K	19,000	$58.38	$3.27
14:29:12	FIG	MID	BUY	CALL $61	2025-10-24	$4.1M	$61	19K	576	19,000	$58.38	$2.17

Net Premium: $6.2M (buy puts) + $4.1M (buy calls) - $2.5M (sell puts) = $7.8M net debit

🤓 What This Actually Means

This is a modified diagonal put spread + long call combo - an institutional-grade hedging strategy! The trader:

• Near-term protection: Bought 19,000 contracts of $61 puts (OCT 17 PUT $61) expiring October 17th (1 day out) for $6.2M - this provides immediate downside protection above current price
• Cost reduction: Sold 19,000 contracts of $53 puts (OCT 24 PUT $53) expiring October 24th (8 days out) collecting $2.5M - this reduces cost while establishing a "buy the dip" level
• Upside exposure: Bought 19,000 contracts of $61 calls (OCT 24 CALL $61) expiring October 24th for $4.1M - maintains bullish participation through earnings

Position size: 19,000 contracts = 1.9M shares = ~$110M notional exposure

Unusual Score: EXTREME (Institutional desk-size trade) - This is a major hedging program, likely from a fund with significant FIG exposure managing risk through the critical earnings/lock-up window!

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📈 Technical Setup / Chart Analysis

YTD Performance Chart

Figma (FIG) has had a spectacular yet volatile post-IPO run with +177.6% YTD performance! The stock IPO'd at $33 in July 2025, soared to an all-time high of $142.92 on August 1st, then crashed over 50% to current levels around $57-58.

Key observations:
- Explosive start: From $20.82 IPO base to $120+ in just weeks
- Brutal correction: Down from $143 high to $58 current (-59.5%)
- Massive volatility: 501.3% implied volatility signals extreme uncertainty
- Recent stabilization: Trading in $55-65 range through October
- Max drawdown: -58.77% from peak - typical post-IPO volatility

The dramatic selloff was triggered by Q2 2025 earnings revealing decelerating growth from 48% in 2024 → 46% in Q1 → 41% in Q2, with guidance suggesting 33% in Q3 and potentially 30% in Q4.

Gamma-Based Support & Resistance Analysis

Current Price: $57.79

The gamma chart reveals critical levels that perfectly explain this trade's structure:

🔵 Put Gamma Support Levels:
- $57 (Strongest Support): 1.97M total GEX with net -1.08M bearish positioning - immediate floor
- $56: 1.55M total GEX providing secondary support just 3.1% below current price
- $55: 6.22M total GEX (largest support zone) - major accumulation level
- $50: 1.61M total GEX - final backstop support

🟠 Call Gamma Resistance Levels:
- $58 (Immediate Resistance): 1.07M total GEX - right at current price creating ceiling
- $60: 9.17M total GEX (massive wall) - first major breakout target
- $61: 10.00M total GEX (LARGEST LEVEL) - perfectly explains the $61 strike choice!
- $62: 1.38M GEX with positive bias - secondary resistance
- $65: 4.92M total GEX with strong call gamma - major upside target

Trading implications:
- Stock is pinned between $57 support and $58 resistance in tight range
- The $61 strike has 10M GEX - the heaviest concentration, explaining why both the long call and long put use this strike
- Net GEX bias is bearish (29.93M puts vs 25.13M calls) supporting the protective put positioning
- The $53 short put sits well below support at $55-57, providing cushion
- Break above $60-61 would trigger significant upside momentum toward $65

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🎪 Catalysts

🔮 Upcoming Events

Q3 2025 Earnings - November 5, 2025
- Figma will report Q3 2025 results after Nasdaq close on Tuesday, November 5th (20 days from this trade)
- Guidance calls for $263-265M revenue (33% YoY growth) - critical test of whether growth stabilizes
- Wall Street watching for evidence of reacceleration from Config 2025 product launches
- Key metric: 129% Net Dollar Retention Rate sustainability for customers spending $10K+ ARR
- Q2 showed profitability turnaround with $28.2M net income and 89-90% gross margins

Lock-Up Expiration - November 7, 2025
- Critical technical event: IPO lock-up expires at market open on November 7th (22 days out)
- Substantially all Class A shares tied to IPO become eligible for trading
- Potential significant selling pressure from early investors and employees
- Extended lock-up for senior stakeholders remains until mid-2026
- This explains the October 24th expiration - expires before lock-up and before earnings, suggesting focus on near-term volatility

Google Cloud Partnership Impact
- October 9, 2025 partnership announcement to "empower next generation of creative builders"
- Strategic partnership could accelerate enterprise adoption
- May provide technical infrastructure boost for AI capabilities
- Details still limited - watching for concrete implementation news

AI Credits Monetization (Late 2025)
- Plans to offer additional AI credits for purchase in late 2025
- New revenue expansion opportunity beyond base subscriptions
- AI image generation, auto-suggest, contextual cues already integrated
- Could drive Net Dollar Retention higher if adoption strong

✅ Recently Completed

Config 2025 Product Suite Launch (May 2025)
- Figma doubled its product portfolio with four major AI-powered launches in May 2025
- Figma Make: Prompt-to-code tool generating working prototypes from text
- Figma Sites: Build and publish dynamic websites directly, competing with Webflow/Framer
- Figma Buzz: Brand/marketing tool for visual assets at scale, targeting Canva's territory
- Figma Draw: Enhanced vector editing competing with Adobe Illustrator
- Products rolling out over coming months - adoption rates will be Q3/Q4 catalyst

New Content Seat Pricing ($8/month)
- Introduced "content seat" at $8/month for Buzz, Slides, FigJam, Sites CMS
- Refined pricing/packaging strategy across expanded portfolio
- Optimizing monetization to drive ARPU expansion
- Early adoption metrics will be key in upcoming earnings

IPO Success Despite Volatility
- July 31, 2025 IPO at $33/share on NYSE
- Stock more than tripled on debut day
- Raised capital to fund AI expansion and product development
- Now navigating typical post-IPO volatility and quarterly scrutiny

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🎲 Price Targets & Probabilities

Using gamma levels, catalyst timing, and current technical setup:

🚀 Bull Case (30% chance)

Target: $65-75 breakthrough before October 24th

Path to profits:
- Strong pre-earnings momentum on positive business updates
- Config 2025 products showing strong early adoption metrics
- Analyst upgrades ahead of November 5th earnings
- Break above $61 gamma wall triggers momentum to $65 resistance
- Google Cloud partnership reveals concrete revenue opportunity

For this trade: The $61 long calls (OCT 24 CALL $61) would profit significantly, while $53 short puts (OCT 24 PUT $53) expire worthless. Maximum gain scenario.

Catalysts supporting: New product monetization, AI credits launch, enterprise expansion

😐 Base Case (45% chance)

Target: $55-62 range-bound through October

Most likely scenario:
- Stock stays pinned between $57 support and $61 resistance
- Pre-earnings positioning keeps volatility elevated but price stable
- Volatility remains high heading into November 5th earnings and November 7th lock-up
- Wait-and-see attitude from institutions until growth trajectory clarifies
- Gamma keeps price contained in current range

For this trade: The October 17th $61 puts (OCT 17 PUT $61) provide protection if near-term dip, then position pivots to synthetic long through October 24th expiration. Modest profits or controlled loss.

Catalysts supporting: Stable guidance, in-line metrics, no major surprises

😰 Bear Case (25% chance)

Target: $45-53 retest of lows

Downside scenario:
- Pre-earnings business weakness signals emerge
- Competitive threats from Canva (1/5th the price, 170M users) intensify
- AI disruption concerns as 63% of design workflows automated
- Analyst downgrades ahead of November 5th earnings
- Pre-lock-up selling pressure from nervous holders
- Valuation reset from 27-30x sales to 15-20x (-30% to -40% downside)

For this trade: October 17th $61 puts (OCT 17 PUT $61) provide immediate protection, but exposure remains through $53 short puts (OCT 24 PUT $53) which would be assigned. Limited downside protection, force buy at $53.

Risk factors: Growth deceleration, competitive pressure, valuation compression

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💡 Trading Ideas

🛡️ Conservative: Follow the Protection Play

Strategy: Buy protective puts for existing FIG position

Specific trade:
- Own FIG shares at current levels
- Buy $55 puts (NOV 7 PUT $55) expiring November 7th (after earnings and through lock-up)
- Cost: ~$2-3 per share for protection

Why this works: Gets you through both earnings (Nov 5) and lock-up (Nov 7) with defined risk. The $55 level has massive 6.22M GEX support - logical floor.

Max Risk: Premium paid (~$2-3 per share)
Max Reward: Unlimited upside on shares
Probability: 60% chance of protecting against 10%+ drop

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⚖️ Balanced: The Earnings Straddle

Strategy: Long straddle at $60 strike

Specific trade:
- Buy $60 calls (NOV 7 CALL $60) + Buy $60 puts (NOV 7 PUT $60) expiring November 7th
- Cost: ~$8-10 total premium (estimate based on 501% IV)
- Profit if move >$10 in either direction

Why this works: Extreme 501% volatility suggests market expects massive move. Post-IPO stocks often see 15-20% swings on earnings. The $60 strike sits right at major 9.17M GEX level.

Max Risk: Premium paid (~$8-10 per share)
Max Reward: Unlimited on either breakout
Breakeven: $50 or $70 - needs big move
Probability: 40% chance of profitable move given extreme volatility

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🚀 Aggressive: Replicate the Smart Money Play

Strategy: Modified version of the institutional trade

Specific trade (smaller scale):
- Buy 10 contracts $60 puts (OCT 17 PUT $60) October 17th (~$4 = $4,000)
- Sell 10 contracts $53 puts (OCT 24 PUT $53) October 24th (~$1.30 = $1,300)
- Buy 10 contracts $60 calls (OCT 24 CALL $60) October 24th (~$3 = $3,000)
- Net cost: $5,700 for 1,000 share equivalent exposure

Why this works: You get immediate downside protection through Oct 17, then synthetic long exposure through Oct 24. This captures pre-earnings volatility without holding through the actual Nov 5 event. Cost is reduced by the short put.

Max Risk: $5,700 + potential assignment at $53 if crash below
Max Reward: Unlimited above $60 breakout
Complexity: HIGH - requires active management
Probability: 35% chance of profitable outcome, but risk well-defined

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⚠️ Risk Factors

Growth Deceleration Continuing
- Revenue growth slowing from 48% → 46% → 41% → projected 33% is alarming trend
- If Q3 shows further deceleration below 30%, stock could crater
- Market won't tolerate decelerating growth at 27-30x sales multiple

Extreme Valuation Risk
- Trading at 27-30x forward sales vs typical software 10-20x
- P/E ratio exceeds 280x trailing twelve months
- Any growth disappointment could trigger 30-40% correction
- Post-IPO stocks often see multiple compression after initial euphoria

AI Disruption Threat
- 63% of design workflows now automated by generative AI
- AI-native platforms could render traditional design tools obsolete
- Figma must prove it's benefiting from AI, not being disrupted by it

Intense Competition
- Canva: $40B+ valuation, 170M users, 95% Fortune 500, 1/5th the price
- Adobe: After failed $20B acquisition, aggressively competing with Creative Cloud
- Microsoft: Bundling design tools into Office 365 threatening commoditization
- Market share erosion would devastate growth narrative

Lock-Up Expiration Selling
- November 7th lock-up expiration could flood market with shares
- Early investors and employees may rush to lock in profits after 100%+ gains
- Technical selling pressure could overwhelm fundamentals
- Extended lock-up for execs doesn't eliminate risk

Margin Compression
- Management expects margins to decline near-term from AI/product investments
- Non-GAAP operating income guidance shows $88-98M for full 2025, down from $127M in 2024
- Growth investments necessary but hurt profitability story

International Monetization Gap
- 85% of users outside U.S. but only 20% of revenue from international
- Suggests major pricing/go-to-market challenges in global expansion
- Limits total addressable market growth

Post-IPO Volatility
- 501% implied volatility is extreme even for tech stocks
- Options are priced for massive moves - premium expensive
- Quarterly earnings will have outsized impact on stock price
- Institutional repositioning after lock-up adds uncertainty

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🏁 The Bottom Line

Real talk: This $12.8M multi-leg strategy is institutional-grade risk management ahead of Figma's (FIG) critical November 5th earnings and November 7th lock-up expiration. The trade structure tells us smart money expects near-term volatility but notably expires BEFORE earnings on October 24th.

The position is brilliantly constructed:
- October 17th puts protect against immediate downside
- October 24th calls capture any pre-earnings rally or positive business updates
- October 24th short puts reduce cost and expire BEFORE both earnings and lock-up selling hits

If you own FIG: Consider the November 7th lock-up risk seriously. This trade expires October 24th specifically to avoid that selling pressure. Either hedge with protective puts through November or be prepared for volatility.

If you're watching: The November 5th earnings are make-or-break for growth narrative. If Figma can show reacceleration from Config 2025 products, the stock could break out of the $57-61 range. If growth decelerates further, watch for retest of $50 lows.

If you're bullish: Wait for post-earnings clarity. The extreme 501% volatility means options are expensive. Consider buying shares and selling covered calls above $65 to collect premium.

If you're bearish: The 27-30x sales multiple leaves massive room for downside. Post-IPO stocks often see 50-70% corrections when growth disappoints. Put spreads below $55 offer attractive risk-reward.

Mark your calendar:
- October 24, 2025: This options trade expires
- November 5, 2025: Q3 earnings after close - THE catalyst
- November 7, 2025: Lock-up expiration - potential technical pressure
- Late 2025: AI credits monetization launch - next growth driver

The fact that someone deployed $12.8M in premium with such precise strike and expiration selection tells you this isn't speculation - it's a sophisticated hedge by someone with major exposure. Pay attention to what smart money does, not what they say!

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Disclaimer: Options trading involves substantial risk and is not suitable for all investors. This analysis is for educational purposes only and not financial advice. Past performance doesn't guarantee future results. The extreme volatility in FIG makes options especially risky. Only invest capital you can afford to lose entirely.

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About Figma, Inc. (FIG): Figma operates a browser-based design platform for the complete software development lifecycle, serving 95% of Fortune 500 companies with 13 million monthly active users. The company generates revenue through platform subscriptions and recently IPO'd in July 2025 at $33/share with a $31.26 billion market cap in the prepackaged software sector.