Shopify’s stock rose by 20% after revealing exceptional second-quarter results. The Canadian ecommerce platform saw its revenue increase by 30.7% from the previous year, pushing shares to a three-year high.
At present, Shopify’s stock is trading at $152.50, while the S&P 500 and NASDAQ have recorded increases of 0.6% and 0.8%, respectively. India faces an additional 25% tariff from the US, bringing the total to 50%, aimed at curbing Russian oil trades.
Shopify’s net income for the June quarter, excluding equity investments, reached $906 million, up from $171 million the previous year. Free cash flow margin stayed at 16%, rising from $333 million a year ago to $422 million in Q2.
Revenue, recorded at $2.68 billion, exceeded Wall Street forecasts by $130 million. The company projects revenue growth in the mid-to-high 20% range annually for the next quarter, alongside a low-20% increase in gross profit.
Shopify’s stock is up 43% year-to-date and has climbed 180% over the last year. While some consolidation may occur, the Relative Strength Index at 68 suggests it’s not overbought, with potential support around $128 in the event of a pullback.
Based on Shopify’s incredible second-quarter performance, we see a clear bullish trend for the stock. The 30.7% revenue growth and surge in net income signal strong operational health. This momentum, pushing the stock to a three-year high, suggests positive sentiment that we can act on.
Given this strength, we are looking at call options for the September and October 2025 expirations to capitalize on the upward trend. Recent option flow data from August 5th shows call volume at nearly three times the daily average, with significant interest in the $160 and $170 strike prices. This indicates a broad market expectation for continued gains in the coming weeks.
However, the 20% single-day jump has significantly increased the stock’s implied volatility, making call options more expensive. This premium increase means that while the direction is favorable, the cost of entry for a simple long call strategy is now higher. We must therefore consider strategies that mitigate this high cost.
A bull call spread could be a more prudent approach, allowing us to express a bullish view while capping our cost and risk. By simultaneously buying a lower-strike call and selling a higher-strike call, we can reduce the net premium paid. This strategy benefits from a continued, steady rise in the stock price toward our higher strike.
For those of us who are bullish long-term but anticipate a possible short-term consolidation, selling cash-secured puts is an attractive option. We can look at selling the September 2025 puts with a strike price near the $128 support level. This allows us to collect premium now and potentially acquire the stock at a discount if it does pull back.
Looking back at similar earnings blowouts in the tech sector during the 2023-2024 recovery, a brief period of consolidation often followed a major gap up before the next move higher. This historical pattern suggests that patience may be rewarded. We should not be surprised to see the stock trade sideways for a bit before challenging new highs.
We must also watch the wider market, as the new US tariffs on India could introduce broader economic uncertainty. A recent July 2025 report from the US Census Bureau showed a slight slowdown in online retail sales growth, which could act as a headwind for the entire e-commerce sector. This reminds us that even strong company performance can be affected by macroeconomic factors.
The company’s own guidance for mid-to-high 20% revenue growth gives us confidence in the underlying business. The Relative Strength Index at 68, while high, is not yet in the extreme overbought territory above 70, suggesting there could still be room for the stock to run. We will position our trades to reflect this positive outlook while managing the risk of high volatility.
