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Blazin

Blazin

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Jysin said:
SPY and QQQs a few % off recent highs and everyone loses their minds. (Finance twitter)

God help us if we see an actual correction of 10%+
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Mood swings perfectly correlated to the chart.

Despite today, we have a vix thats meh. Everything found a level here in the last hour, all it will take is one stair step (higher low+higher high) and it can close the day as a rather minor move.

We break to new lows and close on the low you'll get a more substantive vix jump.
 
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Blazin

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Kind of amazing MSTR can be down another 4.5% but those puts I sold yesterday are red. With premiums so high very hard for anyone long those options to make money.
 
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Tmac

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Blazin said:
Kind of amazing MSTR can be down another 4.5% but those puts I sold yesterday are red. With premiums so high very hard for anyone long those options to make money.
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I'm very retarded when it comes to options, so help me understand what you're saying here...

You sold puts yesterday for profit, but they're already in the red, even though MSTR is down another 4.5%. Which isn't logical, except for the fact that MSTR premiums are so high anyone trying to short it long term is going to lose money?
 
Blazin

Blazin

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Tmac said:
I'm very retarded when it comes to options, so help me understand what you're saying here...

You sold puts yesterday for profit, but they're already in the red, even though MSTR is down another 4.5%. Which isn't logical, except for the fact that MSTR premiums are so high anyone trying to short it long term is going to lose money?
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No, I sold the put to start which means I'm short the contract. Sold to Open , Buy to Close. It's the opposite of what you are use to with a standard long position. So when you sell to open an option contract you benefit when it goes down.


So I sold the $265 put contract for $2.11 , I collected the price as the entry. I close the position by buying or it expires worthless. So any price below $2.11 is a profit any price above is a loss. The most I can make the contract is $2.11 (x100 per contract) .

When the implied volatility is high the price of the contract goes up. The amount over intrinsic value is called premium. In this case the contract has no intrinsic value as MSTR is trading at 330 and the strike is 265. We have a thread that goes over this stuff I think but let me know if you need more clarification.
 
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D

Dalren

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I plan to swap some TSLA into MSTR if MSTR hits < 270. I like your put range, we are heading in that direction unless BTC makes a comeback. I'm thinking it's going to stay in it's current range of 80-100k until around inauguration date (Could also be a sell the news and we tank harder, who knows).

Woulda,coulda,shoulda sold MSTR in the 440-540 range when it peaked after eating the shorts and had way to much hype built up.

Swap would occur in a tax free account.

Edit - Swap would only be a temporary ride up and then it's going back into TSLA my longer term hold right now.
 
Lejina

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Just noticed, gold spot increased by 27% in 2024. Like the S&P.

Is the S&P for maintaining value and gold for investing or vice-versa?
 
Jysin

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1735572950548.png
 
Sanrith Descartes

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BA loses another plane and the stock is down less than 2%. Its like the market just accepts their planes crash on the regular now.
 
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Sanrith Descartes

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Im trying to track a correlation for BTC and MSTR. Up until about Q1 it ran pretty tight, almost 1:1. And then the election hits and it diverges to an extreme degree. Since MSTR is basically BTC, there shouldn't be this divergence or at least not to this degree. There is a fuckton of FOMO and hopium baked into MSTR stock price right now. Or am I reading something wrong? All of the Trump effect shouldn't impact MSTR outside of BTC because they are basically the same thing. MSTR should move in some sort of correlation to its underlying asset, BTC.

1735578227169.png
 
Jysin

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I can never figure why you would overpay for MSTR (plus the leverage risk) and not just buy Bitcoin or one of the ETFs.
 
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Jysin

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550 shares of IWM here on the double bottom on the weekly. Hope we get some resolution as yields begin to reverse.
 
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Flobee

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If BTC does what people think/believe its going to do then MSTR could potentially be the most valuable company in the world. I suspect some of that belief is baked into the premium. Given how the volatility from the convertible bonds is being transmuted into the stocks volatility I suspect there will be plenty of buying opportunities even if its true that its going up big-time.

Its a pretty crazy situation and I don't think there is any historical precedent to compare against. Nobody knows how to price it
 
Sanrith Descartes

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Flobee said:
If BTC does what people think/believe its going to do then MSTR could potentially be the most valuable company in the world. I suspect some of that belief is baked into the premium. Given how the volatility from the convertible bonds is being transmuted into the stocks volatility I suspect there will be plenty of buying opportunities even if its true that its going up big-time.

Its a pretty crazy situation and I don't think there is any historical precedent to compare against. Nobody knows how to price it
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Im not disagreeing with your premise. My point was MSTR should not "significantly" be priced above its underlying asset.

Its like if gold increases 100% in a year and a company who holds gold bullion as its only asset/source of revenue has its share price go up 4x during the same year.

You can take the same investment and just buy the underlying asset (BTC/Gold). It would be different if the underlying asset weren't able to be bought.
 
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Flobee

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Sanrith Descartes said:
Im not disagreeing with your premise. My point was MSTR should not "significantly" be priced above its underlying asset.

Its like if gold increases 100% in a year and a company who holds gold bullion as its only asset/source of revenue has its share price go up 4x during the same year.

You can take the same investment and just buy the underlying asset (BTC/Gold). It would be different if the underlying asset weren't able to be bought.
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Its a commonly made point and definitely conventionally true. MSTR is offering BTC price exposure to a fixed income market that is getting absolutely destroyed in the current environment. Every offering he makes is oversubscribed. How much money is sitting in the fixed income market desperate to buy what he is offering ( some % BTC upside with little to no downside )? How do you price that? I'm not saying its price is justified, I have no clue, just that this is in no way a normal stock to be treated normally.

Saylor uses the analogy of MSTR being a refinery, that transforms crude BTC into a refined financial product. Like crude oil into gasoline, diesel, plastics etc. Again, not saying he is right, just that this likely has some value outside of just the underlying asset
 
Sanrith Descartes

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Flobee said:
Saylor uses the analogy of MSTR being a refinery, that transforms crude BTC into a refined financial product. Like crude oil into gasoline, diesel, plastics etc. Again, not saying he is right, just that this likely has some value outside of just the underlying asset
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But its a shitty analogy. The BTC I can buy on Gemini isn't "unrefined crude" BTC. Its the exact same BTC he is buying. I'm not knocking MSTR. My question is why people are willing to pay 3-4x for the stock compared to the alpha of BTC itself.
 
Flobee

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Sanrith Descartes said:
But its a shitty analogy. The BTC I can buy on Gemini isn't "unrefined crude" BTC. Its the exact same BTC he is buying. I'm not knocking MSTR. My question is why people are willing to pay 3-4x for the stock compared to the alpha of BTC itself.
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You're not a fixed income fund that can't access spot BTC though. MSTR is diluting shares via convertible bonds for the fixed income market then buying spot BTC with that capital. I'm in no way qualified to explain the details but if you're really curious and haven't done the homework Saylor has talked about it plenty, in great detail, in a number of podcasts.

Stated another way the convertible bonds are the refined product he is making, and the pool of capital that has an appetite for that product is what? At least $50 trillion on a quick google search. They need positive yield and can't buy BTC so they'll buy MSTR bonds. That capital becomes future spot BTC buys for MSTR that reflects in stock price. I dunno how to value that is what I'm saying. I don't think anyone does right now
 
Sanrith Descartes

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Flobee said:
You're not a fixed income fund that can't access spot BTC though. MSTR is diluting shares via convertible bonds for the fixed income market then buying spot BTC with that capital. I'm in no way qualified to explain the details but if you're really curious and haven't done the homework Saylor has talked about it plenty, in great detail, in a number of podcasts.

Stated another way the convertible bonds are the refined product he is making, and the pool of capital that has an appetite for that product is what? At least $50 trillion on a quick google search. They need positive yield and can't buy BTC so they'll buy MSTR bonds. That capital becomes future spot BTC buys for MSTR that reflects in stock price. I dunno how to value that is what I'm saying. I don't think anyone does right now
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Ok, so if you are saying the share price surge is due to institutional investors who can't buy BTC directly then I follow that. But, then those same investors should be selling during rebalance periods because of the explosive share price run up. So every fund who put in big dollars before Q4 when it was priced at sub-$200 have made so much profits that they should be selling to get their fund weights in line.
 
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