Hotel operator Hilton Hotels Corporation (NYSE: HLT) entered the earnings confessional this morning, reporting first-quarter earnings of 2 cents on revenue of $874 million -- both well below analyst forecasts. Though the company reported that 97% of its hotels were opened at of the end of April, it wasn't enough to offset the effects of pandemic-related travel restrictions. At last check, HLT was seen down 0.4% to trade at $127.68.
Today's negative price action has Hilton stock pacing for its fourth-consecutive loss, with a chance to close below the $127 level for the first time since April 22. The 60-day moving average, which has caught multiple pullbacks since early February, is still in place as a layer of support, but the pressure just emerged at the 10-day trendline. Year-to-date, Hilton Hotels stock is still holding onto a 14.6% lead.
Meanwhile, the options pits have been leaning bullish. The security sports a 10-day call/put volume ratio of 1.84 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which stands higher than 75% of readings in its annual range. This suggests a relatively heavier-than-usual appetite for calls of late.
Now that earnings are in the rearview, it looks like the perfect time to enter on HLT with options amid a volatility crush. The security's Schaeffer's Volatility Index (SVI) of 35% sits in the low 15th percentile of all other annual readings, meaning the stock sports attractively priced premiums at the moment.
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