PANews reported on May 26 that according to CoinDesk, a report released by 10x Research last Friday pointed out that despite the record high price of Bitcoin, the share price of MicroStrategy (MSTR) has stagnated, showing that investor enthusiasm has waned. The agency recommends using a put spread strategy at a time when the MSTR share price diverges from the price of Bitcoin. This is done by buying a $370 put option expiring on June 27 and selling a $300 put option expiring on the same day. If the MSTR stock price falls to $300 or less by June 27, the strategy will maximize profits. Put options protect against the risk of falling prices, and the maximum loss is limited to the initial cost.
On Friday, MSTR shares fell 7% to $369. MicroStrategy holds 576,230 BTC, the largest holdings of any publicly traded company. The stock diverged from the price of Bitcoin, causing the market to be alarmed. According to Thielen, this reflects the gap between the strength of Bitcoin and the weakness of MSTR, and investor enthusiasm is waning. The strategy also hedges against potential Bitcoin weakness.
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