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With warmer weather, and more families planning vacations, investors may want to jump into oversold hotel stocks.
According to IPX 1031, “As Americans enter 2025, travel remains a top priority. Our 2025 travel outlook report finds 92% of Americans are planning to hit the road or take to the skies this year. More than half of people across the country are eager to travel more than they did in 2024.”
That being said, hotel stocks could be standout winners.
Look at Marriott International (MAR).
After diving from about $305 to a recent low of $230, it’s attempting to pivot higher. It’s also over-extended on RSI, MACD and Williams’ %R. Plus, it has a history of running higher during the warmer travel months of the year. Even better, the company just declared a 63-cent dividend, which is payable on March 31 to shareholders of record as of February 27.
The most basic way to price an option is to start with a strike price. If IBM is trading, for example, at $90 a share, and you decide to buy a call – or in Wall Street parlance, to go long a call – at the $95 strike price, you are buying the right, but not the obligation to own IBM for $95 a share until that option’s expiration. Now, take that $95 and multiply it times the interest rate that you would have to pay if you borrowed money from the bank, say 8 percent. If you’re not borrowing the money, multiply the strike price times the interest rate you would get paid if you put your capital in a certificate of deposit (CD) today, say 1.8 percent.
For the sake of illustration, let’s pick an interest rate of 8 percent to borrow money to buy the $95 call: $95 x 0.08 = $7.60.
Now, multiply that by the number of days for the life of the option, such as 30 days for a one-month option: $7.60 x 30 = $228.00.
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