Options #2: "Fortune favors the bold"
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I recently wrote an article about options; in case you missed that, here it is:
Just like my early retirement post, I decided to write about options also consistently for two things:
This would be like my trading journal that I can go back to learn in case I fail and also to learn in case I succeed.
I just like to share things that I think are valuable.
⚔️Fortune favors the bold
We had another bitcoin drop, and the sentiment is bad. Most people are frustrated because we haven’t increase in prices since March 2024.
You can see this reflected on the bitcoin fear and greed index
To me, I see this as buying opportunity.
I took this opportunity to load up another leverage play.
So basically, I borrowed money to buy a long date call option (Not Financial Advice, this is a risky strategy)
I bought a Dec 2025 $380 MSTR call option.
So basically, MSTR should be above $380 on Dec 2025 for this to be profitable.
MSTR is trading at $125 as of close today. Bitcoin is at $57k.
So MSTR should 3x from now in Dec 2025 for this to be profitable.
I am entering this trade because I’m betting that bitcoin will be 3x from now on or before December 2025. To be exact bitcoin should be at $150,000 on Dec 2025.
Assuming price is at $150,000 on Dec 2025, price of MSTR at ff NAV premium are as follows:
4.83 NAV premium - $775
8.15 NAV premium - $1,308
You can simulate MSTR prices at certain bitcoin prices using this tool: mstr-tracker.com
This are just estimates and not price targets.
My breakeven MSTR price on this trade is $400 (includes the premium paid). The cost to enter this trade is $1,560 ($15.60 x 100)
I need MSTR to be above $400 on or before Dec 2025 for this work to trade.
Assuming that MSTR hits the above NAV on Dec 2025, here are the possible profits:
MSTR at $400 - zero profits
MSTR at $775 - $37,500
MSTR at $1,308 - $90,800
📂OPTIONS PORTFOLIO:
Here is an updated look at my options portfolios:
⚠️WARNINGS/DISCLOSURES
There are dangers in owning options, so here are some warnings/reminders in case you want to explore options further:
Only bet what you can afford to lose. Don’t bet all your portfolio into options just because you wanted to magnify or leverage your gains. Options is like leverage. It is a risky play because you need to be right on a limited time.
That’s why the first thing you should ask when buying call options is that am I willing to lose what I am going to bet?
Read a lot or watch a lot of YouTube videos about options. Also practice if you can before buying. I did practice buying some cheap calls on bitcoin miner before I bought BITO calls. I am also practicing selling covered calls and cash secured puts in preparation for the strategy I will be using for my IBKR portfolio.
Cold Storage, no leverage bitcoin is still the Gold (bitcoin) standard. Having a lot of cold storage bitcoin is still the best. Options has lot of risks. Cold Storage bitcoin should be the majority of your stack. The mistake we all can make is to part with our bitcoin stack.
I wanted to share this because I just wanted to open source my trades. Also, this is not financial advice. I believe there is value on learning how to use options. Especially if you believe in bitcoin 4-year cycles.
Thank you for reading!
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