Satellite Buzz Triggers MAXR Stock Surge

Calls are being picked up at a quicker than usual clip

Deputy Editor
Feb 3, 2020 at 2:30 PM
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News that space technology specialist Maxar Technologies Inc (NYSE:MAXR) will be manufacturing Intelsat 40E, a geostationary communications satellite for Intelsat (I). The satellite will be integrated into NASA's pollution monitoring payload, Tempo, and will help detect pollution incidents in North America early on. The satellite is expected to launch some time next year. 

MAXR chart Feb 3

In response, MAXR is up 4.3% at $16.64 and earlier touched a one-week high of $18.45. This rebound has helped halt a three-day losing streak, sparked by the recent broadmarket sell off. In fact, this bounce, facilitated in part by the equity's 40-day moving average, has Maxar back on its way towards its Jan. 21 annual high of $21.45. 

Options are moving at a slightly quicker-than-usual clip, too. So far 2,017 calls have crossed the tape, compared to just 451 puts, with the February 20 call the most popular contract.

This tendency towards calls isn't unusual for MAXR, with a whopping 44.86 calls bought for every put at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) during the past 10 days. This ratio sits in the 84th percentile of its annual range. This suggest a much bigger-than-usual appetite for long calls of late, albeit amid light absolute volume. 

And while short interest has started to unwind, down 7.2% in the last reporting period, the 8.65 million shares sold short represent a solid 14.8% of the stock's available float. Plus, it would still take almost a week to buy back these bearish bets, which could propel Maxar higher, should short sellers continue to hit the exits. 

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