Traders The addition of leverage on top of the already leveraged MSTR index ETF signals an increased risk appetite as well as a build-up of speculative excesses.
- Options Tie to Defiance’s MicroStrategy Fund (MSTX), 2X long, exhibits extreme bullish positioning.
- The The leveraged ETF is designed for two times or 200% the daily performance of MSTR’s share price.
The Crypto market right now is a roller coaster with a few extra turns, pushing the thrill to new heights.
With As bitcoin (BTC), the cryptocurrency, is on its way to the $100,000 mark traders are using options linked to an exchange-traded funds (ETFs) that is already leveraged by 2x and tied to MicroStrategy’s share price. This allows them to increase their gains.
The Defiance Daily Target 2X Long MSTR ETF is traded under the ticker MSTX NasdaqThe goal is to achieve a daily performance that is two times, or 200%, the MSTR share price. The ETF surged 20% and briefly topped $180 on TuesdayMSTR increased by 10% to $473.
MeanwhileAccording to data tracked by analytics platforms, the trading volume of options tied to ETFs exploded. Market participants piled into the $230 deep out-of the-money (OTM), higher strike call option. ConvexValue. Deep OTM calls have a lower price than those at or near the market rate for the underlying assets, and offer an asymmetrical payout potential.
The The strike call of $230 was spread over multiple expirations, including contracts that settle on June 20, 2025. A call option gives an investor the right, but not the obligation, to purchase the underlying asset for a predetermined amount on or before a certain date. The Option allows the purchaser to take control of a large amount of the underlying asset, while paying only a small upfront premium. This increases the potential gains.
The Data source says that the MSTR option market is a good example of extreme bullishness. Calls recently traded at record premiums relative to puts used to protect against price drops. Market Chameleon. Similar CME has seen a surge in uber bullish flows. Deribit BlackRock’s spot-bitcoin ETF is a good example of the nascent options that are tied to this fund. They hint at a retail investor mania, and a buildup of speculative overspending which often leads to market corrections.
The As expectations for a more friendly regulatory approach rise, frenzied actions follow. President-elect Donald Trump You can also find out more about the following: Fed BTC is boosted by rate cuts. The The top cryptocurrency by market cap reaches new lifetime highs over $97,000 in early ThursdayCoinDesk’s data shows that the gain for the month to date is 38%.
MSTR has the largest BTC stash in the public domain, with 331 200 coins ($3.04billion) steadily accrued since 2020. At One point on WednesdayThe company was traded more than any other U.S. stock. Nvidia According to the National Disability Act (NVDA), Eric Balchunas, a Senior Analyst at Bloomberg. Nvidia Market capitalization is almost three times that of MicroStrategy.
UPDATE (Nov. 21, 09:17 UTC): Adds MSTR was Wednesday’s Last paragraph, the most traded U.S. stocks.
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