Space-based cellular broadband network AST SpaceMobile (ASTS) is up 240% over the past year. One trader is betting that shares will continue higher through the end of summer.
That’s based on the September 20 $22.50 calls. With 52 days until expiration, 6,160 contracts traded compared to a prior open interest of 103, for a 60-fold rise in volume on the trade. The buyer of the calls paid $1.40 to make the bullish bet.
ASTS shares recently traded for about $16.50, right near their 52-week high, meaning shares would need to rally by $6, or over 36%, for the option to move in-the-money. Shares have been trending higher, and recently hit a new 52-week high.
The company is still in its early stages and is far from profitable, losing over $90 million overall last year. Revenues also remain challenging, with ASTS barely reporting any over the last year.
Action to take: With ASTS launching commercial satellites, they’re still building out their network. The company can turn to profitability in time. The uptrend in shares is likely to continue at this early stage.
For traders, the September $22.50 calls are aggressive, but could still see high double-digit returns over the coming months. Shares have more than tripled since May, and have had a few periods of consolidation along the way.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.