Blue Owl Plummets 6.35% Amid New Fund Launch and PayPal Partnership – What’s Next for the Bearish Trend?

Summary
• Blue Owl (OWL) trades at $17.455, down 6.35% intraday after a $7B BNPL deal with PayPal and a $850M interval fund launch.
• Intraday range spans $17.33 to $18.7777, with 8.5M shares traded, reflecting heightened volatility.
• Technicals show a bearish crossover: 200-day MA at $20.39 (well above current price), RSI at 61.16 (neutral), and MACD (-0.07) below signal line (-0.15).
• Sector peers like Apollo Global (APO) also underperform, down 4.22%, signaling broader asset management sector pressure.

Blue Owl’s sharp decline follows a flurry of strategic announcements, including a $7B BNPL partnership with PayPal and the debut of its first interval fund. The stock’s intraday swing from $18.78 to $17.33 underscores investor skepticism, despite the firm’s bullish rhetoric on alternative credit. Technical indicators and sector dynamics suggest a critical juncture for OWL.

New Interval Fund and PayPal Partnership Spark Volatility
Blue Owl’s 6.35% drop reflects mixed signals from its recent strategic moves. The launch of the $850M OWLCX interval fund, targeting the $11.2T asset-based finance market, highlights its push into alternative credit. However, the $7B BNPL partnership with PayPal—while expanding its credit exposure—may raise concerns about asset quality and margin compression. Investors are likely recalibrating valuations amid a 544x dynamic P/E ratio, which suggests overvaluation relative to earnings. The stock’s intraday collapse aligns with broader sector headwinds, as asset managers grapple with cost inflation and margin pressures. The bearish technical setup, including a 200-day MA at $20.39 and a MACD crossover, amplifies short-term selling pressure.

Asset Management Sector Under Pressure as APO Slides 4.22%
The asset management sector is broadly underperforming, with Apollo Global (APO) down 4.22% and Blue Owl (OWL) falling 6.35%. This reflects structural challenges, including eroding revenue yields in high-fee equity funds and rising operational costs. Blue Owl’s focus on alternative credit and private markets contrasts with peers like APO, which rely more on traditional asset classes. However, the sector’s convergence of public and private strategies—driven by demand for semi-liquid products—has intensified competition. Blue Owl’s recent deals, while innovative, may not yet offset these macro pressures, leaving the stock vulnerable to profit-taking and technical sell-offs.

Options Playbook: OWL20251017P17 and OWL20251121P17 Lead the Bearish Charge
• Technical Indicators:
- 200-day MA: $20.39 (well above current price)
- RSI: 61.16 (neutral but bearish bias)
- MACD: -0.07 (below signal line -0.15)
- Bollinger Bands: Upper at $19.20, Middle at $18.47, Lower at $17.74
- K-line pattern: Short-term bearish trend

OWL’s technicals suggest a continuation of the downtrend, with key support at $17.74 (lower Bollinger Band) and resistance at $18.47 (middle band). The 6.35% drop has triggered increased put activity, with two contracts standing out for bearish exposure:

• OWL20251017P17 (Put, $17 strike, expiring 10/17):
- Implied Volatility: 34.63% (moderate)
- LVR: 46.14% (high leverage)
- Delta: -0.346 (moderate sensitivity)
- Theta: -0.0115 (moderate time decay)
- Gamma: 0.2366 (high sensitivity to price moves)
- Turnover: 4,885 (liquid)
- Payoff (5% downside): $0.63 per contract (max(0, $17.33 - $17)).
- This contract offers a balance of leverage and liquidity, ideal for short-term bearish bets as OWL tests $17.74 support.

• OWL20251121P17 (Put, $17 strike, expiring 11/21):
- Implied Volatility: 37.97% (moderate)
- LVR: 21.92% (moderate leverage)
- Delta: -0.388 (moderate sensitivity)
- Theta: -0.0082 (lower time decay)
- Gamma: 0.1424 (moderate sensitivity)
- Turnover: 23,322 (highly liquid)
- Payoff (5% downside): $0.63 per contract (max(0, $17.33 - $17)).
- This longer-dated put provides more time for OWL to decline, with high turnover ensuring ease of entry/exit.

Trading Setup: Aggressive short-sellers should target OWL20251017P17 for immediate bearish exposure, while OWL20251121P17 suits those expecting a prolonged decline. Watch for a breakdown below $17.74 to validate the bearish case.

Backtest Blue Owl Stock Performance
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Bearish Momentum Intensifies – Short-Term Traders Target $17.74 Support
Blue Owl’s 6.35% drop reflects a confluence of strategic uncertainty and sector-wide headwinds. The stock’s technical breakdown, coupled with a bearish MACD crossover and elevated P/E ratio, suggests further downside. Investors should monitor the $17.74 support level (lower Bollinger Band) and the 200-day MA at $20.39 for potential reversal cues. Meanwhile, Apollo Global (APO)’s 4.22% decline underscores broader asset management sector fragility. For traders, OWL20251017P17 and OWL20251121P17 offer high-leverage bearish exposure. Action: Short-sellers should target $17.74 support; if broken, OWL20251017P17 becomes a high-conviction play.