No doubt you have heard about TSLA buying $1.5 Billion in Bitcoin, following in the footsteps of MicroStrategy (MSTR). Both are among our five long-term Buy and Hold stocks for 2021. We continue to trade TSLA calls in both our Premium and PRO services, and as of January 14th have started to trade MSTR calls in the Blue Line PRO Service. Below was our first call recommendation for MSTR calls, sent out on January 14th. We will be adding a new MSTR position soon after the February 19th expiration. If you are interested in trading MSTR calls with us, now is the time to join: Sign-up.
PS: The MSTR Call Trade is up 1,238% as of today's close.
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MSTR: High risk: High Reward Option Trade
January 14, 2021
When we first added MSTR to our long term portfolio just after Thanksgiving I indicated that we would be trading MSTR options in the PRO Service. Since that time the spread between bid and ask has been too wide for trading, i.e., $1,000 or more between bid and ask for a $5,000 call. That may be changing. This morning with Bitcoin flirting with $40K, MSTR calls are trading with manageable spreads of about $500 and I was able to buy the Feb $700C mid-way between a $300 spread. Game on.
MSTR generated a Buy Signal on the Open today at $567.35.It's high print has been $593.82. At the same time, Bitcoin is trading at $39,820 after touching $40,100 earlier this morning. A break-out to new highs on either one sets up a high risk high reward option trade as follows:
Short-Term Buy Signal: MSTR above $600 (any time)
Option: Feb 19th $700C (currently bid $40.80 - ask $42.50)
If triggered we will be taking this trade in to the PRO portfolio. For most portfolios already in GBTC and/or Bitcoin itself, this kind of trade takes on unnecessary risk, but also unlimited reward. There are 36 days until February expiration...36 days ago MSTR was trading under $300.