BlackRock Plummets 5.5%—What’s Driving the Sell-Off?

• BlackRock (BLK) slumps to $1,050.24, down 5.5% intraday after reporting revenue missed estimates by $20M
• Assets under management hit a record $12.5 trillion, but a $52B institutional client withdrawal spooked investors
• Shares gapped lower from $1,111.46, testing support near $1,034—52-week highs now look fragile
• Sector peers like State Street (STT) also fell 6.7%, but BLK’s fundamentals face unique headwinds

BlackRock’s post-earnings crash mirrors broader market skepticism toward asset managers in a volatile macro environment, with traders now probing critical support levels.

Revenue Miss and Client Exodus Ignite Selling
BlackRock’s shares collapsed as Q2 revenue of $5.42B fell short of estimates, driven by a $52B redemption from a single institutional client in lower-fee index products. While assets under management hit a record $12.5T and adjusted EPS beat forecasts, the revenue miss exposed vulnerabilities in its fee-sensitive index business. The acquisition of HPS Investment Partners—adding $118B in fee-paying AUM—failed to offset the institutional outflow, triggering a technical breakdown from multi-year highs.

Asset Managers Under Pressure as STT Suffers Too
Bullish Options Outperform Amid Overbought Technicals
Technical Indicators:
• RSI: 93.39 (deep overbought)
• Bollinger Bands: Below middle band ($1,038.91)
• 200-Day MA: $984.35 (key long-term support)
• MACD: 33.56 vs Signal 27.84 (bullish divergence)

Bulls face resistance at $1,076 (intraday high), but the RSI extreme suggests a pullback could test the $1,034 low. Traders should watch the $986–$993 support zone formed over 30 days. BKX (Financial Sector ETF) remains rangebound, offering limited leverage.

Top Picks:
1. BLK20250725C1050 (Call, $1,050 strike):
- Theta: -1.90 (rapid time decay)
- Gamma: 0.0115 (volatile price sensitivity)
- Turnover: $62,968 (high liquidity)
- Rationale: The at-the-money call captures volatility with a 69.5% leverage ratio. A 5% price drop to $1,000 would yield a $50 payoff (max loss on theta decay).

2. BLK20250725C1047.5 (Call, $1,047.5 strike):
- Implied Volatility: 20.56% (elevated)
- Delta: 0.56 (balanced price sensitivity)
- Turnover: $12,512 (active trading)
- Rationale: The lower-strike call offers a 59.6% leverage ratio with a tighter delta. A rebound to $1,075 would trigger a $27.5 payoff.

Payoff Primer (5% downside to $1,000): BLK20250725C1050 expires worthless, while BLK20250725C1047.5 retains $47.5 intrinsic value—ideal for hedging.

Action Alert: Fade the overbought RSI with puts, but aggressive bulls can layer into $1,047.5 calls if BLK holds $1,034.

Backtest BlackRock Stock Performance
The backtest of BlackRock (BLK) after an intraday plunge of -6% shows favorable performance in the subsequent days. The 3-day win rate is 53.09%, the 10-day win rate is 52.73%, and the 30-day win rate is 53.82%. Although the returns are modest, with a maximum return of 0.21% over 30 days, the overall trend suggests that BLK tends to recover and even exceed its pre-plunge levels in the short term.

Hold the Line at $986 or Risk a Bearish Break
BlackRock’s fate hinges on stabilizing below its 30-day support ($986–$993). A breach would invalidate its short-term bullish trend, exposing it to 200-day MA tests near $984. Sector peers like STT’s 6.7% plunge underscore the fragility of asset manager valuations amid regulatory shifts and institutional outflows. Traders should prioritize downside protection: Watch for $1,034 holds or a $986 breakdown. For now, the $1,047.5 call offers the best risk/reward to bet on a rebound—provided the fundamentals don’t sink further.