Profiting From MicroStrategy's Bitcoin Obsession

In March 2023, MicroStrategy (MSTR), known for its massive Bitcoin holdings, saw its stock price surge 165% while Bitcoin itself only rose 65%. This seemed unsustainable, and the article details how the author profited by selling options on MicroStrategy stock. They recognized that MicroStrategy's stock price was overvalued, and used a credit call spread strategy to capitalize on this. This strategy involved selling a call option on MicroStrategy with a lower strike price and buying a call option with a higher strike price. This generated a net credit, allowing the author to profit if the stock price stayed below the lower strike price. The author's trade was successful, as MicroStrategy's stock price fell within a few months, allowing them to earn a 100% profit. The article emphasizes the importance of understanding volatility and choosing the right strategies for different situations. It also highlights the potential for profits when identifying overvalued stocks and using options trading techniques.