Ares Management Plummets 3% Amid Sector Volatility and Strategic Shifts

Summary
• Ares Management (ARES) plunges 3.02% to $163.94, marking its worst intraday drop since late 2023.
• Intraday range of $163.445 to $169.01 highlights sharp sell-off amid mixed sector dynamics.
• RBC Capital’s bullish asset management rankings contrast with Ares’ technical underperformance.

Today’s selloff in Ares Management has sent shockwaves through the alternative asset management sector, with the stock trading near its 52-week low. The move follows a flurry of sector-specific news, including RBC Capital’s top-tier rankings for Ares and broader market volatility in financials. Traders are now parsing technical indicators and options activity to gauge the depth of this correction.

Sector Rotation and Valuation Pressures Drive Ares’ Slide
Ares Management’s 3% decline reflects a confluence of valuation pressures and sector rotation. Despite RBC Capital’s bullish assessment of Ares as a top asset manager, the stock’s 101.19x dynamic P/E ratio—well above the sector average—has drawn profit-taking. The sell-off coincides with broader weakness in financials, as the S&P 500 Financials sector underperformed despite the Fed’s dovish pivot. Additionally, Ares’ recent $1.12 quarterly dividend announcement, while attractive, has not offset concerns over yield compression in its private credit portfolio as rates normalize.

Asset Management Sector Splits as Ares Trails Peers
The asset management sector is diverging sharply, with Ares Management lagging behind peers like Ameriprise Financial (AMP) and Northern Trust (NTRS), which have gained 53% and 36%, respectively, in 2025. While RBC Capital highlights Ares’ fee-related earnings growth potential, the stock’s 147% three-year gain has created a valuation overhang. Blackstone (BX), the sector leader, has dipped 0.09% today, signaling broader caution. Ares’ 1.54 beta—well above the market average—amplifies its sensitivity to macroeconomic shifts.

Options and Technicals Signal Strategic Entry Points
• 200-day MA: $163.87 (near support)
• 50-day MA: $168.62 (resistance)
• RSI: 56.73 (neutral)
• MACD: 3.35 (bullish divergence)
• Bollinger Bands: $157.72–$179.52 (wide range)

Technical indicators suggest Ares is consolidating near key support levels. The stock’s 3.35 MACD line above the 4.11 signal line hints at potential short-term recovery, while the 56.73 RSI indicates neither overbought nor oversold conditions. Traders should monitor the $163.87 200-day MA as a critical psychological level. The $168.62 50-day MA could act as near-term resistance if bulls regain control.

Top Options Picks:
• ARES20260116P165 (Put, $165 strike, Jan 16 expiration):
- Implied Volatility: 24.46% (moderate)
- LVR: 40.48% (high leverage)
- Delta: -0.5307 (sensitive to price swings)
- Theta: -0.0151 (low time decay)
- Gamma: 0.0446 (responsive to volatility)
- Turnover: 55,190 (liquid)
- Why it stands out: This put option offers high leverage with moderate implied volatility, ideal for capitalizing on a potential breakdown below $165. A 5% downside scenario (to $155.74) would yield a $9.76 payoff, making it a high-reward short-term play.

• ARES20260220P170 (Put, $170 strike, Feb 20 expiration):
- Implied Volatility: 28.99% (moderate)
- LVR: 15.61% (moderate leverage)
- Delta: -0.5979 (high sensitivity)
- Theta: -0.0293 (moderate time decay)
- Gamma: 0.0213 (moderate responsiveness)
- Turnover: 46,340 (liquid)
- Why it stands out: This put provides a longer time horizon (mid-February expiration) with strong delta exposure. A 5% drop to $155.74 would generate a $14.26 payoff, balancing risk and reward for cautious bears.

Trading Outlook: Aggressive bulls may consider ARES20260116C160 (call, $160 strike) if the stock rebounds above $168.62. However, the put options highlighted offer superior risk-adjusted returns in a bearish scenario. Watch for a breakdown below $163.87 to confirm the bearish case.

Backtest Ares Management Stock Performance
The backtest of Ares Management's (ARES) performance after an intraday plunge of -3% from 2022 to the present shows favorable short-to-medium-term gains. The 3-Day win rate is 57.99%, the 10-Day win rate is 63.09%, and the 30-Day win rate is 74.09%, indicating a higher probability of positive returns in the immediate aftermath of the plunge. The maximum return during the backtest period was 8.11%, which occurred on day 59, suggesting that ARES has the potential for recovery and even exceed pre-plunge levels.

Ares at Crossroads: Buy the Dip or Exit the Dip?
Ares Management’s 3% drop has created a pivotal inflection point for investors. While the stock’s 52-week low of $110.63 remains a distant floor, the $163.87 200-day MA and $157.72 Bollinger Band support levels are critical near-term benchmarks. The options market is pricing in a 24%–29% implied volatility range, suggesting moderate bearish sentiment. For now, the path of least resistance appears downward, with the ARES20260116P165 put offering a compelling high-leverage entry. Watch Blackstone (BX) for sector cues—its -0.09% move today mirrors broader caution. If Ares breaks below $163.87, the put options highlighted could deliver outsized returns.