Marriott Put Volume Jumps After Hack

MAR stock is reeling after the hotel chain said a Starwood database was breached

by Andrea Kramer

Published on Nov 30, 2018 at 10:29 AM

The shares of hotel chain Marriott International Inc (NASDAQ:MAR) are 6.4% lower to trade at $113.99, after the company warned that the personal data -- including possible payment information and passport details -- of about 500 million guests was exposed. Hackers apparently began tapping the Starwood guest database in 2014, though the breach wasn't discovered until after an internal security alert on Sept. 8. The New York Attorney General's office is investigating, as the company was apparently obligated to report the breach to the office immediately.

Prior to today, MAR stock had been in a channel of lower highs and lows since peaking at $149.21 in late January. The security touched an annual low of $106.96 in late October, but upward momentum stalled in the $125 area on more than one occasion.

Analyst downgrades could be a possibility, though Marriott hasn't yet given estimates as to the possible financial impact of the data breach. Even before today's turn lower, eight of 17 analysts maintained "buy" or better opinions, with not a "sell" to be found.

Meanwhile, several recent option buyers are likely cheering. On the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock's 10-day put/call volume ratio of 1.25 is in the 73rd percentile of its annual range. That indicates that buyers have picked up MAR puts over calls at a faster-than-usual clip in the past two weeks.

Within the first hour of trading, MAR has already seen nearly 7,276 puts cross the tape -- 13 times the average intraday pace. It looks like traders are expecting more downside for the shares today, with possible buy-to-open activity detected at the weekly 11/30 114- and 115-strike puts, which expire today.

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