Um I called this way before Jonarb! I posted this today but its been charted for weeks. Where is my praise!!!??? I want my Kudos???? https://www.elitetrader.com/et/threads/bitcoin-price-thread.315402/page-626#post-6035873
John, I wonder if I could ask for your opinion. You made a post a few days ago which I haven't been able to find (I might have not looked hard enough), but you essentially laid out your parameters for buying options on MSTR. I think you said make sure the expiry is sometime into late 2025, and you suggested on picking a strike price that will be very much in the money. I'm of course an options noob, but I wonder if you can summarize your reasoning for this. I fully understand the need for something like a Nov 2025 expiry, since this is when the top should roughly be, but why not buy calls that are out of the money and hence should be cheaper? I have been holding an ETH ETF since 2021 that came very close to being break even when ETH hit about $4000 six months ago, but I didn't close it, and well, we all know how ETH is going. Its only $2.5k right now, so I'm down about $1.5k. I figure that if ETH does recover, I might get out break even, but at the same time, if it does recover, I think bitcoin should be doing much better, and MSTR, even better still. So I'm thinking why not just take this $2.5k that I have in the ETF, and buy some lottery tickets, (ie. MSTR options) Of course there is the risk that even if BTC does well, the MSTR premium might close. But I think its a very good risk to take. If my ETH trade would be able to be closed for a tiny profit, this means the bull market is fully on, and this means that my $2.5k will likely grow much higher in a MSTR option rather than in the ETH ETF. It all can of course go to shit, and my option might end up losing heavily, but if this is the case, I'm sure that the ETH price will also go down the toilet. (of course, the option can be worthless the closer we get to the expiry, and ETH will likely always have some value, but its a risk I can take since its such a small position). The idea would be to spread out my buys on the options, and perhaps even wait for a dip of some sort, but what strikes would you be looking at and which expiry dates? Thanks!
**** not financial advice **** Sorry for the confusion, was trying to post what I think is safe for the forum readers, but not what I would actually do with options if limited funds gloves off way out of the money options were my previous 2 mstr options plays, due to limited cash, but at the money options my current options trade initiated months ago I work backwards I imagine a price on where mstr would be if bitcoin is at a certain price, for example options expiry Jan/2024, I mentioned $60k/btc when I initiated the trade in June 2022 and thought in Oct-Nov 2021 price of mstr was $700-900, so conservatively projected $750/mstr and that would give me 400% roi on my wotm options purchased in Jun/2022 based on intrinsic value alone tl;dr $750 mstr price target by Jan/2024 (back in June 2022 when mstr price was mid $200'sh) Beginning of Jan this year, after selling the options above, purchased the wotm July options $2100 mstr price target by July/2024 After purchase of the wotm options, the next 3 weeks were brutal for mstr, but I was more confident that this play would be a winner and posted my target for the record But I was wrong My mstr price target was based on $100k/btc with the etf's pushing it there before July, instead, mstr price moved way faster way ahead with much more momentum as btc broke previous ath and hit above $70k with $2000 mstr price, I hit my profit target of $1M options time premium was very expensive and I still had a lot of it for the remaining options I hadn't sold but this put me in a nowhere land I had no plans for and was blind(ed by greed?), btc was nowhere near $100k and to be perfectly honest I was greedy and very much wanted to see the mstr price when btc hit $100k tl;dr, btc went into sideways choppy mode tl;dr, I work backwards, the price I'm expecting for mstr price by June/2025 is $1000-1500/share, after earnings with FASB rule change and with a bitcoin price of over $130k/btc The Twitter mstr crowd were loading up on the Jun 250's and 325's when mstr was below $150 and as higher strikes opened up, started buying those, I don't know what their price target for mstr by June 2025 , probably as bullish as I am some more some less With more liquidity funds to play with, I'm playing conservative mstr options, truth be told, I'd prefer to hodl mstr shares for 5 years (or longer) with a price target of $100k/share, $10k/share now because of recent 10-1 split, no expiration on shares But it would be throwing way too much potential profits for this bull market cycle. All this I already mentioned in the first page tl;dr if I have limited funds, I'd play the June 2025 way out of the money options the 400's might be open by next week and if I hit good profits by June expiration, cash out secure profits for taxes and what not and buy wotm options for Dec 2025 with the plan to sell in Nov 2025 As already experienced, mstr ngu goes into turbo mode when btc makes nice moves, perhaps with btc volatility dampening with all the tradfi players and options hedging and futures basis trades, may take it into account when mstr gets ahead of bitcoin price None of these are financial advice, of course, all for entertainment purposes only
Absolutely! Thanks for the thorough explanations and insights. I did look at some option chains, and its interesting to me that, for example, the Sep 2025 $300 call has a bid/ask of $50-52. Obviously if MSTR isn't above $300, this option expires worthless, and maybe the point isn't to hold till expiry, but it seems kind of expensive to buy a call when the stock right now is $200 and can be held for however long you want. I'm obviously not in the options frame of mind, so maybe this is about right. I was hoping to spend considerably less, knowing that I can lose the entire premium, so maybe the right play is just to buy the stock and hope that hits at least outperforms BTC by 2x. Yup... this is the conundrum. To be honest, I'm am still not convinced of the bull market yet. Obviously, now is the time to buy, especially leveraged plays, not after breaking ATH or breaking $100k, but this 6 months has been painful, mostly I guess because of my BITX position that had bled $4k profits. Its just a small position, but it still sucks to learn how sideways action is terrible for leveraged instruments... LOL I have also seen comparisons of where we are in the market cycle with regards to previous cycles, and we are about right where we should be given the sideways action. What was also interesting that I just saw in a podcast was how they say that the biggest part of the move has happened very quickly in the past. Maybe just a few months. So once it gets going, there isn't too much time to enjoy the bull market. I still think that its highly possible that there won't be a major crash because Bitcoin could reach "escape velocity" where enough wealth is converted into bitcoin that an 80% crash just doesn't happen. So maybe it goes to $500k, many people sell, but it only goes as low as $400k, and then everyone starts buying back in, pushing it higher again. I understand that people think bitcoin will take decades to radically transform the monetary system, but as I've mentioned before, I don't see how $2T deficits and a $35T debt can go on much longer with rates in the 3-5% range. If they drop down to zero again, they are essentially saying the currency is worthless, and Bitcoin can easily surpass the Market Cap of gold, which only ever drops like 10-20% maybe in a correction. So if BTC only corrects 20%, its too risky to sell, and if nobody sells, we don't get the 80% crash. Everyone is now trained to get in for the bull market, and run for the hills when the bear market hits. But I'm honestly guessing that this could be a trap this time, and unlike in the previous cycles, where the holders took the hit and rode it down 80%, it will be the sellers who take the hit, having to buy back in even higher because it never goes low enough for them to get back in. In terms of the economy, I watch so many podcasts, and people who I respect have made cases for both a crash, based on who you listen to, and also continued market rising. Its crazy how nobody can agree. Now here is something juicy. I was watching a Luke Gromen podcast, and he answers a question about MSTR and if its like what the Hunt Brothers did with Silver. The answer is incredible. He specifically talks about how the only thing the government could do was strategically selling some BTC it had at key levels, hoping to suppress price. Its an interesting comment given the recent announcement of US selling. I have the video cued up to this question.
$300 by Sept 2025?? I think mstr will hit that before end of this month Oct Bitcoin will go into the bullish Q4 in the next 2 weeks Some are saying after the election I think maybe what I can say if you want confirmation is wait until after bitcoin hits $80k before you buy the mstr options
"Some are saying" lol. It looks like we are going up to (C), but from there it could continue on and this is a single correction, or it could retrace and begin the double correction. I think everyone is too excited. A lot of people are on margin picking their lambo colours....not enough pain yet imo...need a flush to 48k. Chain exposed would tend to agree with my assessment...only 16% of supply is holding at a loss right now...needs to be more pain imo.