Ares Management (ARES) Plummets 5.8%: What's Fueling the Selloff?

Summary
• Ares Management (ARES) plunges 5.8% to $170.61, its lowest since May 2025
• $500M investment in Chelsea FC and insider sales dominate headlines
• Options chain shows 217% price change ratio on 10/17/2025 put options

Today’s selloff in Ares Management has sent shockwaves through the asset management sector, with the stock trading at its lowest level since May 2025. The sharp decline follows a flurry of news: a $500M investment in struggling Chelsea FC, insider selling, and a surge in put option activity. With intraday volatility spiking and technical indicators flashing caution, investors are scrambling to decipher whether this is a buying opportunity or a deeper correction.

Chelsea Investment and Insider Sales Trigger Flight to Safety
The selloff is directly tied to Ares’ $500M investment in Chelsea FC, a move widely perceived as a high-risk bet on a financially unstable entity. Compounding concerns, insider selling—most notably 150,000 shares by Chairman Bennett Rosenthal—has raised red flags about management’s confidence. Meanwhile, the broader market’s rotation into cash and defensive assets has amplified the pressure. The stock’s 52-week high of $200.49 now feels like a distant memory as liquidity dries up and short-term technical indicators turn bearish.

Options Playbook: Capitalizing on Volatility with ARES20251017P170 and ARES20251017P175
• 200-day average: 171.43 (just below current price)
• RSI: 57.0 (neutral but trending down)
• MACD: -0.016 (bearish crossover)
• Bollinger Bands: Price at 170.61 (near lower band at 174.86)

ARES is in a short-term bearish phase, with a bearish engulfing candle and RSI approaching oversold territory. The 200-day MA at 171.43 acts as a critical resistance level. A 5% downside scenario (to $162.08) could trigger significant put option gains. Two contracts stand out:

• ARES20251017P170: Put option with 30.55% IV, 32.69% leverage ratio, delta -0.477, theta -0.0398, gamma 0.029863, turnover 726,085
- High leverage and moderate delta position it to capitalize on a 5% drop
- 166.33% price change ratio suggests strong demand
- Projected payoff: $7.92 per share (max gain if price falls to $162.08)

• ARES20251017P175: Put option with 28.88% IV, 21.71% leverage ratio, delta -0.631, theta -0.0038, gamma 0.02988, turnover 1,056,325
- High gamma ensures sensitivity to price swings
- 145.45% price change ratio indicates robust liquidity
- Projected payoff: $12.92 per share (max gain if price falls to $162.08)

Both options offer asymmetric risk-reward profiles. Aggressive short-sellers may consider ARES20251017P170 for a 5% downside target, while ARES20251017P175 provides higher leverage for deeper declines. Watch for a breakdown below 170.61 to confirm bearish momentum.

Backtest Ares Management Stock Performance
The back-test confirms that buying Ares Management (ARES) after a single-day close-to-close drop of 6 % or more and holding for up to 20 trading days delivered a positive—but not spectacular—risk-adjusted return during 2022-present. While the strategy captured several sharp rebounds, it also endured a sizeable drawdown and only a moderate Sharpe ratio, suggesting that draw-down control mechanisms or a tighter entry filter might be needed before allocating real capital.You can review every detail, tune the inputs and visualise trade-by-trade results directly in the module below.Feel free to explore the module—adjust the holding period, add stop-loss/take-profit rules, or try a different plunge threshold to see how the profile changes.

Act Now: Ares at Pivotal Crossroads as Sector Leader BLK Dips 0.47%
The selloff in Ares Management reflects a perfect storm of high-risk bets, insider skepticism, and macro-driven flight to safety. With the stock trading near its 52-week low and technical indicators flashing caution, the immediate outlook remains bearish. Investors should monitor the 170.61 support level and 171.43 200-day MA for directional clues. Meanwhile, sector leader BlackRock (BLK) is down 0.47%, signaling broader market fragility. For ARES, a breakdown below 170.61 could trigger a test of the 174.86 Bollinger Band support. Position yourself with ARES20251017P170 or ARES20251017P175 to capitalize on the volatility—watch for a 5% downside move to validate the bearish case.