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Trade alert on ProLogis (PLD) put seller

Near-term put volume in ProLogis (NYSE: PLD ) is on the rise during morning trading on Thursday thanks to investors who appear to be selling downside in the real estate investment trust. PLD did not announce any news today to account for the 4% drop in the stock so far on the day.

By 11:30 a.m. EST, more than 11,200 October 10 puts had crossed the tape versus current open interest of 190 contracts. These near-the-money puts changed hands in several blocks for an average price of 70 cents per contract. This price was closer to or at the bid price when the volume hit the tape. The options action on the tape indicates investors most likely expressed moderate bullishness on PLD and are willing to cap maximum profits to do so.

The put sellers will make a maximum of the credit collected if PLD shares are trading higher than the strike price at October options expiration. If the stock is trading between the strike price and the breakeven price of $9.30 at expiration, the investor gives back some of the premium collected. Once PLD shares drop below the breakeven, however, the investor begins to lose money and will continue to suffer losses until the stock reaches zero.

PLD shares are trading roughly 26% higher than their 52-week low of $8.36. The stock dropped 44 cents to $10.64 during morning trading, and is underperforming the broad-market weakness. On July 22, PLD announced in-line earnings figures of 14 cents per share and beat revenue estimates for its second quarter. The day after its earnings release, JPMorgan upgraded the company to "neutral" from "underweight." The upgrade did not seem to boost the stock, but it looks like investors expect the downside to be short-lived.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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