Arbor Realty Trust Plunges 14.5%: Earnings Shock and Sector Headwinds Spark Urgent Sell-Off

Summary
• ABR’s stock nosedives 14.57% to $9.87, its lowest since 2023, amid Q3 earnings that missed revenue estimates by 28.2%
• Net interest income collapses 56.9% YoY to $38.27M, while GAAP earnings narrowly beat at $0.20/share
• Mortgage REITs face mixed fortunes as Fed rate cuts buoy sector, but ABR’s earnings miss triggers panic selling

Arbor Realty Trust’s (ABR) 14.57% intraday plunge has sent shockwaves through the REIT sector, driven by a Q3 earnings report that exposed severe revenue and income deterioration. With the stock trading at $9.87—its lowest since November 2023—investors are scrambling to assess the fallout from a 56.9% drop in net interest income and a 28.2% revenue miss. The selloff contrasts with broader mortgage REIT resilience amid Fed easing, but ABR’s operational struggles have amplified sector volatility.

Q3 Earnings Miss and Revenue Deterioration Trigger Sharp Selloff
Arbor Realty Trust’s Q3 earnings report delivered a one-two punch to investors: revenue plummeted 28.2% YoY to $112.4M, missing estimates by $39M, while net interest income collapsed 56.9% to $38.27M. Despite a $0.20/share GAAP earnings beat, the 31.6% YoY decline in earnings per share and 29.2% YTD stock drop signaled systemic weakness. The market’s sharp reaction—a 14.57% intraday slide—reflects fears of deteriorating loan performance, with $566.1M in non-performing loans and $808.6M in modified loans. The earnings miss, coupled with a 37.6% discount to its 52-week high, has triggered panic selling, erasing $360M in market cap in hours.

Mortgage REITs Mixed as ABR Underperforms
While mortgage REITs (mREITs) have benefited from Fed rate cuts—posting 10.27% YTD gains—ABR’s Q3 results starkly contrast with sector resilience. Annaly Capital Management (NLY), the sector leader, rose 1.23% intraday, reflecting improved financing spreads. However, ABR’s 14.57% drop highlights its vulnerability: its loan portfolio’s weighted average yield fell to 6.95% from 7.95% in Q2, while non-performing loans surged to $566.1M. The sector’s average 10.5% dividend yield offers some allure, but ABR’s 12.43% yield (at $10.5 strike) comes with elevated risk due to its $246.3M loan loss allowance.

Options and ETF Strategies for Navigating ABR’s Volatility
• MACD: -0.0623 (bearish divergence), RSI: 54.30 (neutral), Bollinger Bands: $11.29–$12.34 (current price at lower band)
• 200D MA: $11.64 (price below), 30D MA: $11.89 (support at $11.86–$11.88)

ABR’s technicals suggest a short-term bearish bias, with RSI hovering near neutral and MACD signaling bearish momentum. The stock is trading at its 20-day low of $9.61, with key support at $11.29 (lower Bollinger Band). For options traders, the ABR20251107P10.5 and ABR20251121P10 contracts offer high leverage and liquidity amid elevated volatility:

• ABR20251107P10.5 (Put, $10.5 strike, Nov 7 expiry):
- IV: 76.21% (high volatility)
- Leverage: 12.43% (high)
- Delta: -0.668 (moderate sensitivity)
- Theta: -0.085 (rapid time decay)
- Gamma: 0.322 (responsive to price swings)
- Turnover: $33,985 (liquid)
- Payoff (5% downside): $0.50/share (max gain if ABR drops to $9.37)
This put option is ideal for aggressive short-term bearish bets, leveraging high IV and liquidity to capitalize on a potential breakdown below $10.5.

• ABR20251121P10 (Put, $10 strike, Nov 21 expiry):
- IV: 65.75% (moderate)
- Leverage: 14.41% (high)
- Delta: -0.489 (moderate sensitivity)
- Theta: -0.030 (moderate decay)
- Gamma: 0.247 (moderate responsiveness)
- Turnover: $23,351 (liquid)
- Payoff (5% downside): $0.43/share (max gain if ABR drops to $9.37)
This contract offers a balanced approach, with high leverage and moderate IV to hedge against a mid-term selloff while allowing time for price recovery.

Action Alert: Aggressive bears should prioritize ABR20251107P10.5 for a 5% downside play, while conservative traders may use ABR20251121P10 to lock in gains if ABR stabilizes above $10.

Backtest Arbor Realty Trust Stock Performance
Here is the back-test dashboard for the “-15 % Daily Plunge Rebound” strategy on Arbor Realty Trust (ticker: ABR) from 1 Jan 2022 to 31 Oct 2025. (The plunge criterion was approximated with a ≥ 15 % close-to-previous-close decline because intraday tick data are unavailable. Risk controls were auto-set to: take-profit 15 %, stop-loss 10 %, maximum holding period 30 days.)You can interactively explore the detailed performance metrics and trade log in the panel above. Key headline figures: • Total return: +1.12 % • Annualized return: 0.43 % • Maximum draw-down: 6.86 % • Sharpe ratio: 0.083 Feel free to let me know if you’d like to adjust the entry criterion, risk settings, or test other securities or periods.

Act Now: ABR’s Earnings Woes and Sector Shifts Demand Immediate Strategy
ABR’s 14.57% plunge underscores its vulnerability to loan performance deterioration and sector-wide financing pressures. While mortgage REITs like NLY (up 1.23%) benefit from Fed easing, ABR’s operational struggles—$566.1M in non-performing loans and a 56.9% net interest income drop—demand urgent risk management. Investors should monitor the $11.29 support level and ABR’s ability to stabilize its loan portfolio. For now, the ABR20251107P10.5 put offers a high-leverage, high-liquidity bet on further downside, while the sector leader NLY’s resilience highlights the importance of diversification. Watch for a breakdown below $9.61 or a dividend cut in November.