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With ProLogis (PLD) featured prominently in the top 5 contestants’ portfolios, its 15% drop at the time of this writing could reshuffle the leader board. The stock is down on nervousness about the real estate sector as the REIT SL Green Realty Corp (SLG) announced that it was cutting its dividend. But with PLD already up over 30% in the last week, what’s a little selloff? In fact, some of the most successful contestants bought PLD sub-$3.00 soon after the start of game, and have patiently held on to their positions. If you’re lucky enough to have a big chunk of your portfolio in a stock that quadruples in value, then you deserve to be at the top of the heap. The only problem is that the January PLD options suggest that the stock has an 8% chance of getting back down to $2.50 between now and January expiration in 19 days. Now, if there’s “only” an 8% chance that the stock will drop $9, maybe that’s a risk you’re willing to take. And it’s only CNBC Bucks at stake. But if this were real money, or I gave you only a 92% chance of not getting hit by a bus when you crossed the street, you might want to rethink the risk. They don’t give out prizes for heroism here -- only for profits. So, if the PLD options also suggest there’s about a 33% chance of dropping to $7.5 between now and Jan expiration. PLD at $7.50 would still leave some of you with significant profits. But would it be enough to leave you at the top? That’s the $500,000 (and a 10 hour Marquis Jet Card) question.
Tom Preston
thinkorswim, Inc.
Member FINRA/SIPC/NFA
thinkorswim, Inc. and its registered employee, Tom Preston, do not solicit or recommend any form of trading in the individual stocks (or their derivatives) mentioned above. Please do careful, independent research before investing any money as well as weigh the possible consequences on your particular financial situation before doing so. The risk of loss may be substantial.
