Question 1: Apparently, the Federal Court has cleared the way for a merger between TPG and Vodafone Hutchinson. Will this be good for Telstra?
Answer: The merger won’t have any immediate impact on Telstra’s earnings, but in the medium term, should be a positive because it will have one fewer competitor. Effectively, an oligopoly of three – Telstra, Optus and Vodafone/TPG. This is why the ACCC opposed the merger. There is a counter-argument that the merger might hasten the rollout of 5G technology by Vodafone/TPG, weakening Telstra’s leadership position. On balance, however, I think it has to be good for Telstra.
Question 2: In this week's ‘Hot Stocks’, Michael McCarthy talked about put options against the ASX200. Are you able to explain this a bit further, what the benefits of this type of strategy are and how would one go about purchasing one of these?