My First Call Synthetic Long Option
Maxar Technologies Inc. provides earth intelligence and space infrastructure solutions all over the world. The Earth Intelligence segment offers geospatial information, applications, and analytic services and the Space Infrastructure segment provides space and ground based infrastructure, robotics, components, and information solutions.
One month ago, the Trump Administration threatened to pull out of the Open Skies Treaty that permits. The Open Skies Treaty which was signed in 1992, permits each state-party to conduct short-notice, unarmed, reconnaissance flights over the others' entire territories to collect data on military forces and activities. The Treaty involves 34 countries, including the US. If the Treaty is dismantled, this could increase demand for satellite surveillance or Maxar’s services.
About a week ago, Maxar acquired Vricon. Vricon is a global leader in satellite-derived 3D data for defense and intelligence markets. But Maxar thinks Vricon's can penetrate the autonomous navigation and 5G telecommunications network planning markets.
Intelsat S.A., together with its subsidiaries, provides satellite communications services worldwide. Intelsat operates the world’s first Globalized Network, delivering high-quality, cost-effective video and broadband services anywhere in the world. Their integrated fleet of approximately 50 satellite and terrestrial connectivity already reaches 99% of the world’s populated regions.
In 1985, their satellites helped with the worldwide television coverage of the Live Aid Concert to benefit the famine victims in Africa reaches millions of viewers across 88 nations. In 2000, their satellites made the Olympic Games in Sydney available to a record four billion people worldwide. In 2007, their satellites help broadcasts the world’s largest high-definition music event in history, Live Earth.
A group of satellite communications operators, known as the C-Band Alliance, which includes Intelsat has made a proposal to the Federal Communications Commission for a private auction of access to the C-Band radio spectrum (5G internet purposes). The auction could create a windfall of as much as $60 billion for the satellite operators.
Intelsat ordered the satellites to transition its existing media distribution and contribution services–uninterrupted–from the 3.7 to 4.0 gigahertz portion of the C-band, to the 4.0 to 4.2 gigahertz portion of the band as part of the U.S. Federal Communications Commission (FCC) plan to reallocate 300 megahertz of C-band spectrum for 5G terrestrial wireless services.
Under the agreement, Maxar will deliver the Galaxy 31, Galaxy 32, Galaxy 35 and Galaxy 36 satellites in 2022. The satellites will provide primarily video distribution services to customers in the continental United States.
"Intelsat looks forward to supporting the FCC in successfully transitioning the C-band spectrum and accelerating America’s path to 5G – all while safeguarding the high-quality media broadcast services in the band that more than 100 million American households currently rely on," said Mike DeMarco, Intelsat’s Chief Services Officer. "Partnering with Maxar ensures that we will have the highest quality satellites in service on time to meet the FCC’s aggressive transition schedule and execute a seamless transition for our customers."
Yesterday, I noticed usual options activity in Maxar. The Smart Money bought over 12,000 call options at the $20 strike price that expires on Aug 21st. Instead of getting long through call options, I decided to put on my first Call Synthetic Long option strategy.
Synthetic stock options are option strategies that mimic the potential of either buying or selling a stock using call and put options. A Synthetic Long Stock involves buying a call option and selling a put option.
So I bought an Aug 21 call option at the $20 strike price and then in an attempt to pay for the call, I sold two Aug 21 put options at the $15 strike price. So my upside is unlimited, but more importantly, my downside risk is I could lose the money I paid to buy the call options, but if the stock went to $0, I could be put the stock at $15 which would be a $3000 lost.
This is the screen shot from yesterday.
This is the screen shot from today.
When I put this trade on, I didn't look at the chart, but if I did, although the demand zone isn't fresh, my puts would of below the zone.
Let see what happens over the next several weeks.
This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.
Posted Using LeoFinance
