Hilton Stock Tumbles Following Surprise Q4 Loss

The equity is still up nearly 43% over the last nine months

Assistant Editor
Feb 17, 2021 at 10:21 AM
facebook twitter linkedin


The shares of Hilton Hotels Corporation (NYSE: HLTare down 2.3% at $110.99 this morning, after the hotel chain reported fourth-quarter losses, which surprised analysts who anticipated a marginal profit. Revenue fell as well, with headwinds from Covid-19 causing a 59.2% year-over-year drop in comparable revenue per available room. 

Today's negative price action has Hilton stock testing support at its 10-day moving average -- a formerly resistant trendline it toppled in early February. The 30-day moving average, which has acted as a floor for HLT during the past couple weeks, continues to provide support on the charts Longer term, the equity has added 42.7% over the last nine months.

Option traders have been targeting calls with gusto. The security sports a 50-day call/put volume ratio of 2.59 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which stands higher than all but 2% of readings in its annual range. This suggests a heavier-than-usual appetite for long calls of late. Echoing this, HLT’s Schaeffer's put/call open interest ratio (SOIR) ratio stands higher than just 8% of readings from the past 12 months, indicating short-term option traders have rarely been more call-biased.

With earnings out of the way, now looks like the perfect time to enter on HLT with options amid a volatility crush. The security's Schaeffer's Volatility Index (SVI) of 39% sits in the extremely low 7th percentile of all other annual readings, meaning the stock sports attractively priced premiums at the moment.

Bernie's Best Stock Bets for Summer 2021

1608308875

 




 
Special Offers from Schaeffer's Trading Partners