DCT Industrial Trust Inc (NYSE:DCT) Risk Points versus Real Estate (XLRE)Date Published: 2017-04-21
This is a scatter plot analysis of the critical risk points from the option market for DCT Industrial Trust Inc (NYSE:DCT) compared to its own past and the Real Estate ETF. In order to examine the forward looking risk for DCT Industrial Trust Inc (NYSE:DCT) the next 30-days, we must look to the option market.
Now, before we dive into the analysis on DCT, we make one critical note since we're talking about options:
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But that's at the end, now let's jump back into the risk point charting and number crunching for DCT Industrial Trust Inc (NYSE:DCT) . We start by noting that DCT is in the real estate sector which means along with some other industries we also compare the company to the closest match we could find, which was the Real Estate ETF (XLRE) as a proxy for DCT Industrial Trust Inc.
We have highlighted the IV30® for XLRE and for DCT in the table below.
|CONTEXT: THE INDICES|
|S&P 500 (SPY)||IV30||11.15%|
|Nasdaq 100 (QQQ)||IV30||12.44%|
|Real Estate ETF (XLRE)||IV30||13.75%|
|DCT Industrial Trust Inc (NYSE:DCT)|
|DCT 52 Week Low||IV30||6.25%|
|DCT 52 Week High||IV30||85.66%|
|DCT Industrial Trust Inc Implied Risk Scatter Plot|
|(a new risk chart, built for option traders)|
Scatter Plot Risk Legend
The blue point is the current 30-day implied volatility for DCT Industrial Trust Inc.
The black point is the current 30-day implied volatility for the Real Estate ETF (XLRE).
The red point is the 52 week low in IV30® for DCT Industrial Trust Inc.
The green point is the 52 week high in IV30® for DCT Industrial Trust Inc.
The various other scatter plot points in the middle give us risk context outside of the real estate sector.
The IV30® is the risk reflected by the option market in the stock price for the next 30 calendar days.
* We can see that the risk as reflected by the option market for the next 30-days for DCT Industrial Trust Inc is in between the indices we have charted but is above the Real Estate ETF (XLRE), which we use as a proxy for DCT Industrial Trust Inc.
* We can further see that the current IV30 for DCT Industrial Trust Inc of 18.04% is closer to the annual low of 6.25% than the annual high of 85.66%. Simply stated, this means that the option market is pricing less risk than the average over the past year.
* For some context, we note that the annual range in IV30® for the Real Estate ETF is between [11.22%, 25.23%] while DCT Industrial Trust Inc has had a range of [6.25%, 85.66%].
Get this same analysis on any ticker here:
A New Kind of Risk Point Chart
This is chart was developed for the trader. It allows us to easily see where the forward looking risk for DCT Industrial Trust Inc (NYSE:DCT) lies relative to the last year, and the various major stock groupings and the Real Estate sector without using time series data, which can confuse the information.
While the option market risk rating is on the low side, we note that companies in this situation are still susceptible to sudden stock move risk, it's simply the probability of that large stock move is depressed. Buyers of options and volatility may find these prices more attractive than at other times.