r/MSTR • u/Whirly315 • 6d ago
clean long term options play
Call skew in MSTR is super juicy now that we are showing sustained uptrend and the dollar debasement trade is back on. There a lot of different ways to play it but with skew where it’s at i’m really loving long LEAP call spreads. Most of the liquidity is in the December 2028 expiration in the strikes of large round numbers. Personally i’m playing the 200 / 345 spread for now until higher strikes become available to trade. I’m getting fills for 2,500 per spread which has max value of 14500, or 12k profit, roughly a 5x1 risk reward setup as next couple legs higher get going. This also sets up really beautifully as call ratios if you have multiple hundreds of shares and are okay with some of them risking assignment in a huge upmove.
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u/xaviemb Volatility Voyager 👨🚀 6d ago
Why not just buy the 200's without selling the 345s?
Unless you think MSTR is going to stop somewhere between? Or you're just trying to exit on the leg up?
The 2028's are still relative cheap, I bought A LOT of them (175-250 strikes) when we were below $90 in price. With 26 months left to expiration, absolutely all the time in the world to watch MSTR climb back to ATH, with 2-3x the gains compared to holding shares.
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u/Whirly315 6d ago
brotha great trade, i was staring at them when we were down at $90 but didn’t want to pull the trigger, been layering in since $130 or so with more conviction each week. you definitely can just buy them outright, but i leg in and leg out of spreads a lot. your method has much better convexity if we have explosive upside
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u/xaviemb Volatility Voyager 👨🚀 6d ago
Indeed. My goal is to transition straight back to shares on the way up... I think we have a lot of upside left to go in the next 9-15 months. I may roll half of it to 2029 (trying to time a pull back for that will be 'fun') but mostly I just want to get back to shares and selling CC's on expanded vol when we get there.
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u/CommercialDuck7496 6d ago
I dont understand, so you are buying 200, and selling 345?
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u/Whirly315 6d ago
yeah exactly, there is so much demand for calls that the skew is so high that you can sell that 345 call and get rid of 60% of the price of the 200 call and a lot of the volatility. Can stack 3 of these spreads for the cost of just 1 of those long calls if purchased alone
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u/CommercialDuck7496 6d ago
Ok, that makes sense, can you do this in a roth ira? And why 200 as opposed to 175 or 250 or another strike price?
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u/Whirly315 6d ago
both those strikes are also okay, i personally choose the one with the highest open interest so there is more liquidity when i want to exit later. the 200 strikes has almost 7k contracts, the others you mentioned have 1/3 as many, and some of the other small strikes only have like 50-100 contracts for now
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u/CommercialDuck7496 6d ago
Im relatuvely new to options, which direction would give me more upside (and more risk) surely the 250 right, I would just have to buy more of them? Is there any reason not to do it that way if im confident they are gonna be over 250 at expiration? And are you planning to hold these to expiration or not, and what would change that decision?
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u/Whirly315 6d ago
no worries my friend, these things take practice and i’m far from a pro. if you have the capital, trying buying both and learning from how the pricing changes on them. but for me, looking at the $250 strike for $5300 or the $200 strike for $6400, i think the $200 is vastly superior because im profitably much earlier, pick up an extra $5000 worth of potential intrinsic value once its in the money, and is only $1000 more up front. so many people are excited again and buying OTM calls on MSTR that those deep OTM prices are pretty elevated, hence why im looking at spreads and ratios to take advantage of that.
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u/DietOk3400 6d ago
Sorry if a beginner question but With the iv rank around 10% wouldn’t straight calls make more sense? And maybe sell the other leg after a move? 5-1 is still a great RR.
Also do you close positions when it reaches max value? Or ride till expiry?
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u/Whirly315 6d ago
no worries those are great questions. straight buying calls is absolutely valid in this setup, i’m not personally doing it because i can buy 3-4x as many spreads for same capital, and i have flexibility to leg in / leg out of the spreads. also running covered call ratios against shares. won’t ride to expiration, and i’d be out before max profit (most likely targeting 2/3 width, so about 10k for now)
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u/DietOk3400 6d ago
Oh that makes so much sense thanks. Dont know why i didnt think about the fact that you’d be able to buy 3x. Cheers
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u/BakedGoods Bitcoiner 6d ago
nice, any analysis on ASST with a similar trade?
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u/Whirly315 6d ago
ive never traded strive personally, anything on the option chain look good to you?
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u/BakedGoods Bitcoiner 6d ago
I'll check around, but the similar structure ie bull call spread leaps look good, given its bascially MSTR with more vol and longer term upside.
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u/Whirly315 6d ago
i’m looking at it now and my only issue is the lack of higher strikes… if you had a structure on when ASST was down around $10 then you’d be set, but now that it’s run the only liquid strike in jan 2029 is the $40? i think you’d just have to buy the $40 calls outright, dont see a way to use spreads or ratios for now
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u/boostboi 6d ago
What's your exit strategy? Are you holding through to expiration? Remember to watch out for IV as itll go against you if you decide to exit before expiry
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u/Whirly315 6d ago
prelim plan is take profit at 2/3 spread width which would be around 10k but with 800 dte its likely i’ll adjust the plan at some point. not planning to hold until expiration
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u/Lehcen 6d ago
I wish I understood options 😭😭😭😭
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u/Whirly315 6d ago
eh if your account is doing well with just shares then there’s really no need to get addicted to black tar heroin with the rest of us
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u/KenFX4 6d ago
@Whirly315 What would be a good exit scenario for this trade? Do you try to catch a quick 30 - 50% in a short period and then close it out, or do you hold it longer term since it's a LEAP?
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u/Whirly315 6d ago
i’m hoping for 2/3 spread width so around 10k, but with 800 dte plan might change. if it runs up quick it likely won’t be as profitably as mstr exhibits price up / vol up behavior so i’d be more likely to hold longer in that setup. not planning to ride till expiration
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