To The Moon

Key Points:

• A married put protects downside of $MicroStrategy(MSTR)$.

• Selling a put generates income and perhaps a better price to buy more.

MicroStrategy has become a prominent Bitcoin owner.  

Short seller Andrew Left pointed out in a post on X, buying MSTR stock made sense several years ago as a way to invest in cryptocurrency without putting all your eggs in one basket. But now MicroStrategy’s valuation has come unglued from Bitcoin.

“Now that Bitcoin investing is ‘easier than ever,’ MicroStrategy’s volume ‘has completely detached from BTC fundamentals,’ Citron wrote in an X post, adding that ‘while Citron remains bullish on Bitcoin, we’ve hedged with a short $MSTR position,” BNN Bloomberg reported.  

While Left makes the point that you might as well own Bitcoin directly if you’re into the cryptocurrency, if you’re hell-bent on owning MicroStrategy stock, here are three options strategies to avoid losing your shirt. 

If you’re a stock market investor, there’s no question which stock you should buy for the long haul, but you’re hell-bent on owning MSTR stock, so here are three options to help you do just that. 

Options Strategy # 1: Buy Call

This first strategy assumes that MSTR will keep moving higher well into 2025.

There are many unusually active call options with strike prices well out of the money. Because you want to own MicroStrategy, buying something near or just out of the money is better.

The Dec. 18/2026 $360 strike fits the bill. With 742 days to expiration, you’ve got plenty of time for it to appreciate 60% or more. Costing $23,040, it won’t come cheap.

$MSTR 20261218 360.0 CALL$

Options Strategy # 2: Married Put

This strategy involves a “married put,” which is when you buy 100 shares of MicroStrategy at current prices and simultaneously buy one long put to protect on the downside. 

So, for example, let’s say you pay $389.9 for the shares and then $35.75 for the Dec. 20 $370 put. The put is just in the money, so your net debit cost is $425.65, the share price paid plus the premium on the put. Your maximum loss is $55.65, the net debit less the $370 strike. 

$MSTR 20241220 370.0 PUT$

The only problem with this strategy is that the protection you’ve placed is for less than a month. Finding a put expiring in 6-12 months is generally recommended. Sometimes, if you believe the short-term volatility will dissipate, a shorter DTE of 30-60 days can still deliver the required protection.         

Option Strategy # 3: Sell Put

The third strategy is straightforward. 

You buy 100 shares of MicroStrategy at the current price of $389.9. You then sell a put option well out of the money for income or the potential to buy 100 more at a lower price, say 20% less. That’s a strike price of around $275. 

One expires on Dec. 27. The $275 strike would generate $970 in income by selling the put for an 52% annualized return. 

$MSTR 20241227 275.0 PUT$

In the worst case, you’re in the red if the share price falls to $265.3. If you’re confident about MicroStrategy, it shouldn’t be an issue.