Microstrategy (MSTR), one of our five core long term stock holdings, is up 12% at $535 this morning. The most recent Short-Term Buy Signal was on December 29th at $365. From PRO update Dec 30, 2020: "MSTR generated a Short-Term Buy Signal at the close of trading yesterday. I did not send it out because the option spreads were just not tradable, most being $800-$1,000 between the bids and asks for all strikes and expirations " The calls, which we should have been trading on this signal are up significantly. The most likely call candidate was the February $400C which was at the time of that signal trading at approximately $50.00 bid, $60.00 ask. That is a 20% ($1,000 ) per contract spread. That is practically un-tradable since the size of the spread also has to be considered on the exit of the trade. Fast forward to today and that call is trading at approximately $150 bid, $160 ask. The stock is up 45%, the option is up 250% -350% depending on where the entry/exits were filled within those wide spreads. MSTR & Calls January 7th MSTR is one of our five core long term positions for a reason and like TSLA there is a huge opportunity this year in both the stock and short-term options coming out of Buy Signals. Once more liquidity comes into these options (note that extremely low volume numbers per call) the spreads will hopefully narrow and we can start taking some of these Buys with a better risk:reward profile. Until then, I will continue to send out MSTR Short-Term Buy Signals, but without option recommendations.
