MSTR as a defined-risk trade for asymmetric risk-reward

Discussion in 'Crypto Assets' started by johnarb, Jun 16, 2024.

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  1. poopy

    poopy

    x-section break-even (fwd date) is at a loss where spot is trading. QQQ was on the screen. Just an example, but skewed tickers make the point.

    upload_2024-11-21_10-34-22.png
     
    #321     Nov 21, 2024
    johnarb likes this.
  2. johnarb

    johnarb

    My current position is a small portion of the profits from earlier in the year, it's easy for me to go all-in on this trade - complete loss of risk-capital or million(s) and anywhere in between

    But to be very honest, after learning about the group of mstr options traders and their massive profits, it is tempting to start trading more aggressively shorter term options, and more frequently (instead of leaps I currently have and a single trade until sell to close next year)

    They have daily swings in the millions of $, with "Grain of Salt" that seems to have the biggest trades in the 9-figures (stocks and options) although majority might be in retirement account(s)

    But I am risk-averse, due to family concerns, I cannot take unnecessary risks, even after taxes I've made from mstr options more than 5 years my previous employment annual salary

    that is much more than enough and very thankful for the blessings...

    it's been a great year, and next year is looking very nicely as well if this bull market continues

    [$200k to $36M m2m below]



    [the most experienced, previous wall street trader]



    [the biggest trader in the group]

     
    #322     Nov 21, 2024
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  3. johnarb

    johnarb

    **** no financial advice, entertainment pose only ****

    Have I succumbed to the temptation?

    upload_2024-11-22_4-56-52.png


    • Citron announced a short position on mstr today...
    • mstr appears to be hitting the ATM selling in size today...
    • possible mstr convertible debt shorting hedge today (60 delta?), it closes today
    All of the above may push the price of mstr too much to the downside presenting a buying opportunity for "discounted" call options

    --------------------------------------

    Possible positive catalyst for next week:

    • Nasdaq-100 inclusion of mstr by next week, and subsequent front-running afterwards as determined by the rank
    • mstr will possibly announce a big buy of bitcoin next week, funds from ATM selling and convertible debt sale
    • mstr does not do any ATM selling next week, ahead of Thanksgiving holiday, and celebration of bitcoin $100k and to get a higher-ranking on the Nasdaq-100
    The risk-reward for a small bet short term ootm call options, not weeklies of course, is a good asymmetric risk-reward trade
    • I've put a trade

    [No changes whatsoever to the existing call options to be closed out 2nd half of next year]
     
    #323     Nov 21, 2024
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  4. NoahA

    NoahA

    Can I ask for specifically which option you bought?
     
    #324     Nov 21, 2024
    johnarb likes this.
    Is this a joke thing or what? Citron made a bulletin after getting their ass spanked on the GME short episode. Didn't they specifically state they were no longer going to be involved in the short-side of the business anymore?
     
    #325     Nov 21, 2024
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  5. johnarb

    johnarb

    Sure, Jan 2025 call 600

    Should be enough time to get the eoy rally, first 2 weeks Jan effect...

    but most importantly, the Nasdaq-100

    lots and lots of funds invest in the Nasdaq-100
     
    #326     Nov 21, 2024
    NoahA likes this.
  6. Hey Poops this looks like the short asym fly you were talking about in another thread. I had a play around with a payoff diagram and there wasn't much difference in this and a bear put spread. The ps had a slightly higher loss and lower win but the sloope was near identical?
     
    #327     Nov 21, 2024
  7. poopy

    poopy

    I don't discuss my triggers for the RR-fly but you want two legs above ATM (in the synthetic). Sacrificing ddrift for less tail risk (against RR delta position). More drift, better risk. You will lose a bit more locally but you get batter tail characteristics (into both tails).
     
    #328     Nov 21, 2024
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  8. poopy

    poopy

    So just pin the max terminal loss ATM at inception. Carry the RR-fly maturity beyond the primary position. Strike selection takes more time.
     
    #329     Nov 21, 2024
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  9. johnarb

    johnarb

    **** not financial advice ****

    Increased my Jan/2025 calls position. I think this Nasdaq-100 inclusion will happen this Friday


     
    #330     Nov 25, 2024
    NoahA likes this.
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