Options Traders Favor Bearish Bets Against Strategy’s MSTR and STRC Amid Bitcoin Decline

Options traders are increasingly positioning for a decline in Strategy (MSTR) and its variable-rate preferred stock STRC, reversing earlier positioning as bitcoin struggles below $60,000.

Put options are dominating trading in both names, with more than twice as many puts as calls trading in Strategy on Friday, and nearly three times as many puts purchased versus calls. Trading volume approached three times the monthly average.

Among the notable bearish activity, some of the largest put-buying strategies involved the YieldMax Short MSTR Option Strategy ETF (WNTR), which shorts Strategy while collecting income through put spreads. WNTR shares have risen 30% since May 11 as Strategy stock has weakened.

Strategy, YTD

STRC, the bond-like preferred stock that Michael Saylor promoted as “digital credit,” fell 3.6% to $92 on Thursday—the lowest level since November of last year.

“The higher Michael Saylor risk factor is being priced in right now,” said David Dziekanski, CEO at Quantify Funds. “After he touted STRC as a strategy to avoid selling bitcoin, then moved away from that approach—spending cash he said would be on the balance sheet to buy back bonds, and then selling bitcoin—it’s now going to take a significantly higher yield for STRC to get back to 100.”

Strategy Inc., YTD

Options volumes in STRC amounted to just over 6,000 contracts, but the most popular directional trades were selling calls and buying puts, according to data from ThinkOrSwim.

A selloff in Treasury bonds and rising yields isn’t helping as the odds of a rate hike this year moved above 40% after solid employment data Friday morning, according to CME’s FedWatch tool. Crypto prices have historically struggled during periods of rising interest rates, and can particularly stress a credit instrument like STRC.

Bitcoin broke below $60,000 for the first time since late 2024 on Friday.

Source link