Options traders are rushing to bet against crypto’s most vocal evangelist, Michael Saylor. Call it a mutiny in strategy.
Flows around Saylor’s Strategy (MSTR) and the Company’s variable rate preferred stock STRC are turning bearish this week after traders were more balanced the previous month despite a steady decline in Bitcoin that began in mid-May.
On Strategy Friday, more than twice as many puts were traded compared to calls and more than three times as many puts were purchased than calls, at nearly three times the average daily volume for the past month. Of the $335 million in premium traded at the time of writing, $250 was tied to puts.
Some of the largest put purchases were tied to the spread strategies used YieldMax Short MSTR Option Strategy ETF (WNTR)a fund that shorts strategy stocks while generating income in put spreads, according to sources familiar with the trading. WNTR shares have risen 30% since May 11 as Strategy stock has struggled.
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Strategy, YTD
STRC, the bond-like preferred stock that Saylor calls a “digital loan” and which he pitches as an alternative to money market funds, fell 3.6% on Thursday to $92, its lowest price since November last year.
“Right now, a higher risk factor is being priced in for Michael Saylor after he touted STRC as a strategy to avoid selling Bitcoin, but then deviated from that and spent cash he said was on the balance sheet to buy back bonds and then sold Bitcoin,” said David Dziekanski, CEO of Quantify Funds, which runs a hybrid Bitcoin equity strategy. “It will now take a significantly higher yield for STRC to get back to 100.”
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Strategy Inc., YTD
Options volume in STRC was just over 6,000 contracts, but the most popular directional trades were selling calls and buying puts, according to data from ThinkOrSwim.
A sell-off in Treasuries and rising yields aren’t helping as the chances of a rate hike this year have risen to over 40% after solid jobs data on Friday morning, according to CME’s FedWatch tool. Crypto prices have struggled during previous periods of rising interest rates and can be particularly stressful on a credit instrument like STRC.
Bitcoin broke below $60,000 on Friday for the first time since late 2024.
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