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Technology Stocks : Loral Space & Communications

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To: Mr. Proofsheet who wrote (2572)4/9/1998 5:27:00 PM
From: Snake  Read Replies (2) of 10852
 
I am considering either puts as a hedge or possibly a straddle or strangle type strategy to protect myself for the 2nd half of the year, primarily the Zenit II launches.

The straddle or strangle strategies would involve buying both puts and calls. I am considering this because I think the stock will move in anticipation of and after the Zenit II launches, the question is will it move up or down (will the launch be successful or not). Would also expect some profit taking for people not wanting to risk these launches as well, so we could see a decline in June/July as this happens.

One of the keys here is not to set it up too soon or you erode your put premium if the stock say takes off another $2-$3 the next couple of months. But also have to consider the volatility portion of the put price too. A lot of variables here.

Still thinking the options over. Once G* has its satcom's launched, I probably will not use puts and let it ride more. I see the Zenit's being Loral's largest risk right now.
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