MSTR Options Skew Rebounds: Neutral Sentiment Replaces Uber-Bullish Outlook

MSTR Options Skew Reflect Neutral Sentiment as Put-Call Skew Hits Zero

According to Market Chameleon, MSTR’s 250-day put-call skew has made a significant recovery over the past three weeks. The metric, which measures the difference in implied volatility between puts and calls, has climbed from -20% back to zero. Instead of the abnormally large premium seen three weeks ago, it means that call options, which traders employ to generate asymmetric upside gains from a possible rebound in the underlying asset, are now trading at parity with puts that provide downside protection. That is, the uber-bullish sentiment has turned into a neutral one.

MSTR’s Bitcoin Strategy Under Fire as Stock Drops 44% From Record High

As to data source TradingView, MSTR‘s share price has dropped by more than 44% to $289 since reaching a record high of $589 on November 21. In the last two weeks alone, the company’s worth has also dropped by 34%.

With MicroStrategy shares now down 44% from their peak and other companies adopting bitcoin as a treasury asset strategy at a much smaller scale, the bitcoin tailwind generated by this narrative appears to be losing steam,

Markus Thielen, founder of 10x Research

Since 2020, MicroStrategy has added 446,400 BTC ($42.6 billion) to its balance sheet, frequently using debt sales to fund the acquisitions. As a result, MSTR is viewed as a leveraged wager on Bitcoin in 2024. It completed the year with a 346% gain, much exceeding Bitcoin’s 121% increase. But the action at the conclusion of the year was unsatisfactory. Although MSTR experienced a 25% decline in December, Bitcoin only saw a 3% decline, remaining comparatively stable at $90,000. It’s an indication that MSTR’s allure as a leveraged Bitcoin wager is waning.

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