Trade Alert – (MSTR) May 28, 2025 – STOP LOSS – SELL

When John identifies a strategic exit point, he will send you an alert with specific trade information as to what security to sell, when to sell it, and at what price. Most often, it will be to TAKE PROFITS, but, on rare occasions, it will be to exercise a STOP LOSS at a predetermined price to adhere to strict risk management discipline.

 

Trade Alert – (MSTR) – STOP LOSS

 

SELL the MicroStrategy (MSTR) June 2025 $335-$345 in-the-money vertical bull call debit spread at $7.00 or best

 

Closing Trade

5-28-2025

expiration date: June 20, 2025

Portfolio weighting: 10% weighting

Number of Contracts = 13 contracts

This trade is the big disappointment of the year.

We got all of the crypto promotion I expected last week. But the very next day after entering this position, MicroStrategy announced a dilutive $2 billion preferred stock issue, which immediately shaved 10% off the price. In this environment, I don’t feel like hanging around for another 18 trading days until expiration.

Sometimes you get snakebit.

If there is any consolation, the loss on this position is more than offset by the profit on our Double short in (MSTR) $130 higher.

MicroStrategy is a highly leveraged long play on Bitcoin and at 97% implied volatility for its options.

Therefore, I am selling the MicroStrategy (MSTR) June 2025 $335-$345 in-the-money vertical bull call debit spread at $7.00 or best.

DO NOT USE MARKET ORDERS UNDER ANY CIRCUMSTANCES.

Simply enter your limit order, wait five minutes, and if you don’t get done, cancel your order and lower your offer by 10 cents with a second order.

If you live in a foreign time zone when the US stock market is closed, such as Australia, or don’t want to sit in front of a screen all day, simply enter a spread of Good-Until-Cancelled orders overnight, like  $7.00, $6.90, $6.80, $6.70, and $6.60. You should get done on some or all of these.

This was a bet that MicroStrategy would not fall below $345 by the June 20 option expiration in 22 trading days.

Here are the specific trades you need to close out this position:

Sell 13 June 2025 (MSTR) $335 calls at………………………..…$39.00

Buy to cover short 13 June 2025 (MSTR) $345 calls at.….….$32.00

Net Proceeds:………………………….…………………………………….$7.00

Loss: $8.40 – $7.00 = =$1.40

(13 X 100 X $1.40) = $1,820

 

 

 

Carlo Ponzi in 1920

 

 

 

 

If you are uncertain about how to execute an options spread, please watch my training video by clicking here.

The best execution can be had by placing your bid for the entire spread in the middle market and waiting for the market to come to you. The difference between the bid and the offer on these deep-in-the-money spread trades can be enormous.

Don’t execute the legs individually or you will end up losing much of your profit. Spread pricing can be very volatile on expiration months farther out.

Keep in mind that these are ballpark prices at best. After the alerts go out, prices can be all over the map.