Last update discussed Bitcoin as a leading indicator. This week, let's look at Bitcoin as a short-to-intermediate term option play. In summary, there are four numbered waves down, with one more wave down to go:
BTC 2-Day
The target area for Wave 5 is in the low $40'K's, a significant dump, pending. The purest play for options is with IBIT, the iShares Bitcoin trust:
IBIT 2-Day
IBIT July Puts
However, the shares of Michael Saylor's Strategy (MSTR) may offer bit more bang for your option's buck.
MSTR 2-Day
As is illustrated by this two-day chart of MSTR, the next leg down is initially targeting under $50. If so, MSTR's journey from the current $112 to under $50 offer's much appreciation potential for out-of-the-money puts. Whether that be one-month out, two months out, or three or more months out, its worth a few swings of the bat in hope of connecting with at least one long ball.
Enough with the baseball analogies, you know what I'm getting at:
MSTR July Puts
If the dump comes before mid-July, the July $90P will go up 20X. Batter-up
MSTR Sep Puts
This is my other option idea for MSTR. Look again at the MSTR chart above and note that the 161.80% Fibonacci extension level is under $20. That is also a potential target and given 90 days to get there, the Sep $50P offers multi-fold appreciation potential without quite the time constraints of the July expiration. Better yet, why not buy both the July $90 and Sep $50 puts and make it a certifiable home run derby?