Shorts target ‘MSTR’ in bitcoin bloodbath
Options traders are rushing to bet against Michael Saylor, the cryptocurrency’s most vocal proponent. Call it rebellion in Strategy.
Flows around Saylor Strategy (MSTR) and the company’s variable rate preferred stock. STRC Despite the steady decline in Bitcoin that started in mid-May, investors are trending downwards this week after being more balanced the previous month.
On Strategy Friday, twice as many puts were sold than calls, and three times as many puts were purchased than calls; This was nearly three times the average daily volume last month. As of the time of writing, $250 of the $335 million premium traded was due to sales.
Some of the largest puts were tied to spread strategies used in the market. YieldMax Short MSTR Options Strategy ETF (WNTR)It’s a fund that collects income on put spreads while shorting strategy shares, according to people familiar with the trade. WNTR shares are up 30% since May 11 as Strategy shares struggle.
Strategy, YTD
STRC, a bond-like preferred stock that Saylor describes as a “digital loan” as an alternative to money market funds, fell 3.6% on Thursday to $92, the lowest price since November of last year.
“A higher Michael Saylor risk factor was priced in after he touted STRC as a strategy to avoid selling bitcoin, but then moved away from that, spent the money he said would be on the balance sheet to buy back the bonds and then sold bitcoin,” said David Dziekanski, CEO of Quantify Funds, which runs a hybrid bitcoin stock strategy. he said. “STRC getting back to 100 will now require a much higher return.”
Strategy Inc., YTD
Options volumes on STRC were just over 6,000 contracts, but the most popular directional trades were calls and puts, according to data from ThinkOrSwim.
The selloff in Treasuries and rising yields aren’t helping, as the odds of a rate hike this year rose above 40% following strong employment data Friday morning, according to CME’s FedWatch tool. Crypto prices have struggled in past regimes of rising interest rates and could particularly strain a credit instrument like STRC.
Bitcoin fell below $60,000 on Friday for the first time since late 2024.
