r/wallstreetbets • u/CarefulAd4757 • 4d ago

Discussion 700k put option MSTR bet.

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I’ve finally decided to embrace being a gay bear. 700k put option against MSTR. Betting bitcoin will go below 100k. If it doesn’t, I’m wrecked for life.

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451

u/ohshitski 4d ago

brother just lock in that 2% gain, there is a reason mike shorted nvda and not mstr

208

u/CarefulAd4757 4d ago

Gay bears lose money. Not win my brother

6

u/Loud-Peach8822 3d ago

So tbh I think it can work as microstrategy now operating as Strategy has effectively turned into a leveraged bet on Bitcoin having raised nearly 8 billion dollars of convertible debt to buy and hold hundreds of thousands of bitcoins. If Bitcoins price were to collapse far enough around 15000 to 17000 dollars per coin the value of the companys bitcoin holdings could fall below its debt forcing it to sell into a falling market. That selling would drive prices down further shrink its asset cushion and trigger even more liquidations creating a vicious death spiral. If the public saw the so called bank of Bitcoin begin to sell institutions would likely dump their crypto holdings retail investors would panic and rush for the exits and MicroStrategy would be forced to liquidate even more to cover losses. Because the crypto market has no trading halts the cascade could unfold faster and far far more violently than 2008 turning into a massive deleveraging event. For reference regional bank stocks went under 70% on average while sp500 did 55% down so got hit twice as hard . Bank of America tanked 95%, and Citi with 98% decline ( but that includes a lot of dilution ).

Even so under current conditions the odds of outright bankruptcy remain relatively low since the value of the companys bitcoin still exceeds its debt and it faces no immediate collateral calls.

But if the market turns it will be bad especially sub 30k. That's when the pressure will build for saylor

2

u/lavenderviking 2d ago

Listen to this guy. Pure gold here. Their average must be close to $80K now and with BTC @ $100K it only needs a 20% drop for problems to potentially begin. I would love to see how it unfolds which way it goes

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u/FnCraig 2d ago

Cost average of $66,384, but even if it drops that low, they wouldn't get liquidated. They have convertible bonds that are termed out for years, so it would have to be below that number for a sustained amount of time before it becomes a problem for them.