Adobe (ADBE) Stock Has Been Beaten Up But the Smart Money Remains Resilient

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Such ignominy isn’t terribly surprising, with the security losing over 26% of value on a year-to-date basis. Over the past 52 weeks, it’s down nearly 42%.Adding to the pressure, a recent read from the options flow screener will likely not soothe frayed nerves. A representation focused purely on big block transactions, options flow during the Feb. 19 session saw net trade sentiment stumble to more than $223 million below parity. A session before that, this metric fell to about $32 million below parity.If Palantir is Near a Bottom, What's the Best Play in PLTR Stock?Option Volatility And Earnings Report For February 23 - 27Get exclusive insights with the FREE Barchart Brief newsletter. Subscribe now for quick, incisive midday market analysis you won't find anywhere else.But before you start panicking out of ADBE stock, there’s an important nuance to keep in mind. Throughout this month, the biggest transactions featuring negative sentiment primarily featured put options that expired last Friday. While the surface area being littered with debit-based puts wasn’t exactly encouraging, what is heartening is that this sentiment headwind has effectively cleared.Even better, volatility skew suggests that, moving forward, the main prioritization isn’t necessarily downside protection. Of course, when you’re dealing with a major name like ADBE stock, risk management is key. Adobe is popular with both retail traders and the institutional types. In essence, the skew provides a holistic picture of how the smart money is positioned.What we’re looking for are aberrant spikes in implied volatility (IV), which would effectively suggest heightened demand for exposure-based insurance. However, the skew is relatively calm, meaning that while there is insurance being bought to protect against sharp downside exposure (commonly referred to as tail risk), the urgency simply isn’t there.Basically, we have information by omission. After such a sharp drop in ADBE stock, you would expect the smart money to cover the flanks. It’s refusing to do so with any meaningful vigor, which may imply a possible recovery.While we now have a working understanding of smart money positioning, we still need to figure out how this may translate into actual price outcomes. For that, we may turn to the Black-Scholes-derived Expected Move calculator. Wall Street’s standard mechanism for pricing options projects that Adobe stock will land somewhere between $233.42 and $283.80 by the March 20 expiration date.Terms and Privacy PolicyPrivacy & Cookie SettingsMore InfoS&P Futures6,869.25 +17.75 (+0.26%)Dow Futures48,914.00 +65.00 (+0.13%)Nasdaq Futures24,866.00 +103.25 (+0.42%)Russell 2000 Futures2,630.30 +4.00 (+0.15%)VIX21.01 +1.92 (+10.06%)Gold5,209.40 -16.20 (-0.31%)Trending tickersIBM International Business Machines Corporation 223.35 -33.81 (-13.15%)HIMS Hims & Hers Health, Inc. 15.51 -0.12 (-0.77%)UBER Uber Technologies, Inc. 70.72 -3.14 (-4.25%)NVO Novo Nordisk A/S 39.63 -7.79 (-16.43%)PYPL PayPal Holdings, Inc. 44.05 +2.40 (+5.76%)PortfolioSign in to access your portfolioSign inTop gainersACLX Arcellx, Inc. 113.75 +49.64 (+77.43%)IBRX ImmunityBio, Inc. 9.83 +1.13 (+12.99%)VRE Veris Residential, Inc. 18.81 +2.04 (+12.16%)VKTX Viking Therapeutics, Inc. 34.46 +3.43 (+11.05%)USAR USA Rare Earth, Inc. 18.79 +1.56 (+9.05%)Top losersNVO Novo Nordisk A/S 39.63 -7.79 (-16.43%)BLLN BillionToOne, Inc. 72.10 -13.32 (-15.59%)IBM International Business Machines Corporation 223.35 -33.81 (-13.15%)RNG RingCentral, Inc. 34.58 -4.92 (-12.46%)STEP StepStone Group Inc. 43.94 -6.13 (-12.24%)Most activeNVDA NVIDIA Corporation 191.55 +1.73 (+0.91%)NVO Novo Nordisk A/S 39.63 -7.79 (-16.43%)IBRX ImmunityBio, Inc. 9.83 +1.13 (+12.99%)SOFI SoFi Technologies, Inc. 18.22 -0.80 (-4.21%)PYPL PayPal Holdings, Inc. 44.05 +2.40 (+5.76%)Top economic eventsEarnings eventsMy earnings eventsEarnings events