10x research, directed by Markus Thielen, likes bassist options about the strategy (MSTR) as the bitcoin that is quoted in Nasdaq
The price of the owner’s shares of the price of upward trend of BTC.
In a report sent to customers on Friday, Thielen recommended a propagation of a MSTR bear, which implies a long position in the sales option of $ 370 and a short position in the $ 300 put, both expired on June 27.
This strategy will produce maximum profits if MSTR falls to $ 300 or less before June 27, which represents a bearish bet of the price of the shares. The sales option ensures that the buyer against the potential price falls in exchange for a small payment in advance.
The maximum loss for Put propagation buyers if Mstr’s price embarks on a new bullish trend is limited to the initial cost of the strategy, which was $ 13.89 on Friday.
Mstr, however, fell 7% to $ 369 on Friday, according to Data Source TradingView. Microstrategy has 576,230 BTC, the largest for any company that is considered in stock market, which has accumulated currencies constantly since August 2020 through debt financing.
Over the years, it has become a preferred instrument for institutions that seek exposure to BTC without having to have cryptocurrency.
The price of the shares has recently dangited the BTC price of upward trend, increasing alarms in cryptographic social networks.
While BTC reached a record of more than $ 110K last week, the rise of Mstr stagnated in around $ 440, reaching its peak of life of $ 543 reached in November.
“This trade captures the growing disconnection between Bitcoin’s force and the faded impulse and the volatility of Microstrategy. Although Bitcoin reaches the maximum of all time, Mstr remains significantly below its peak, which suggests that the enthusiasm of investors is decreasing,” Thieen said, explaining the propagation of the bear.
Thielen correctly predicted the recent increase in BTC in six figures.
Keep in mind that a similar divergence between Mstr and Bitcoin marked the upper BTC of November 2021.
Past data does not guarantee future results, and the last divergence between Mstr and BTC does not necessarily mean that the execution of the Bitcoin bull is over.
That said, suggests a reduced BTC enthusiasm among tradfi investors. In addition, the propagation of Mstr Bear Put could offer coverage against a possible weakness in BTC.
“Bitcoin is breaking records, but the strategy is stagnating, and that divergence matters. Retail trade continues to pursue the dream, without realizing that the advantage of the right tail may have disappeared. This is where the game changes: when the intermediary runs out of premium and the engine stalls,” Thielen said.
“Buying a strategy differential put can be profitable, but it is also an effective coverage against a long Bitcoin position,” Thien added.
