Friday Afternoon Crash?

by JDH on June 8, 2024

For the last two Fridays, about an hour before the close, Bitcoin has had a mini-correction. On Friday, it was down almost 5% from top to bottom.

As a result, from lunchtime until the close, MSTR—Miscrostrategy Inc. was down almost 7%.

What gives?

I have no idea, other than the Big Boyz like to play with the tape leading into the close, to blow out option positions.

It happened to me, but in a good way.

I hold MSTR, and as you know, I’ve been selling covered calls against it.  I had strike prices of $1,600 and $1,650 leading into Friday.  On Friday afternoon, MSTR was trading below $1,650, so I covered my positions, booked a profit, and that was it.

However, had I waited until the close, the options would have expired worthless, and I would have generated a greater profit.

So be it.  I didn’t want the stock to whipsaw back up at the close resulting in my shares being called.  That would be a disaster, because I’m sitting on a huge gain, and I don’t want to prematurely generate a taxable capital gain.

Will I cover this week?

Probably, but I’ll wait until we have an up day or two.  No point in covering at the bottom.

That’s the update.  See you next week.


Sort of won, kind of…

by JDH on June 1, 2024

I don’t want this to turn into the MSTR—Miscrostrategy Inc. blog, but since nothing else is going on in the world, here’s the update:

MSTR had a big drop this week.  It peaked at $1,715 on Thursday, and dropped to $1,445 on Friday before bouncing slightly to close at $1,524.

I am bullish on the stock, so I’m holding, but I want to juice my returns, so I’ve been selling out of the money covered calls with one week to expiry.  The premiums are large, so it should be easy money, but in a bull market, it isn’t.  I’m way up on the stock, but down on the covered call trade.

On Thursday, after the drop, I was able to close out this week’s calls at a nice profit and roll them forward, so I won.  A smarter move probably would have been to close them out and stop, but that’s not my style.  So, we’ll see what happens next week.

Bitcoin is having trouble making a new high.  It could happen tomorrow, or it may take a while.  My assumption is that money printing will continue, and that’s good for risk assets, but who knows.

For now, the summer weather is here, so I won’t spend any more time thinking about it.

See you next week.



Microstrategy Covered Call Options – An Update

May 25, 2024

As frequent readers know, I also have a small position in a Bitcoin ETF and a position in MSTR—Miscrostrategy Inc. It’s a leveraged play on Bitcoin, and I’m up considerably on my position. All good. Since May 1, Microstrategy has increased from just over $1,000 to close at $1,684.84 on May 24, 2024.  A 67% gain […]

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Microstrategy – An Update

May 18, 2024

As frequent readers know, I also have a small position in a Bitcoin ETF and a position in MSTR—Miscrostrategy Inc. It’s a leveraged play on Bitcoin, and I’m up considerably on my position. All good. But, to juice my returns, I decided to sell covered calls against the position.  The theory is simple: if I […]

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Inflation: Up or Down?

May 11, 2024

There are currently two competing narratives: inflation will go up, or inflation will go down.  It’s important to get it right to guide our investing decisions. Inflation is Going Up The “up” narrative is simple: Inflation is up, and there are no reasons to expect anything to change.  That is a compelling argument.  An object […]

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Bitcoin: Interesting Price Action

May 4, 2024

Let’s start with some history, shall we? Everyone knows there is a “halving” every four years, where the number of Bitcoin mined is reduced by half.  The most recent halving was on April 20, 2024.    The previous halving was May 11, 2020. What happened after the May 11, 2020 halving? On May 7, 2020, […]

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The Michael Saylor Interview

April 28, 2024

This week, instead of me droning on, spend an hour and ten minutes and watch this interview. You’re welcome.

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The Anticlimactic Bitcoin Halving

April 20, 2024

Every Bitcoin podcast for the last few months has endlessly discussed the impact of Bitcoin halving.  Understandably, it’s an important event.  Unlike fiat currency, Bitcoin has a limited supply, further limited every four years by the “halving.”  As of yesterday, April 19, the number of new Bitcoin created (mined) daily has fallen from 900 to […]

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April 13, 2024

I’ll keep this short this week because not much is happening. Bitcoin is in a holding pattern ahead of next week’s “halving,” which may or may not be a significant short-term price driver. Gold is up, but is still short of the all-time high in 1980 in real terms. Which brings us to labour. Immigration […]

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And Now We Wait

April 6, 2024

As I write this at 7:00 a.m. on Saturday, Bitcoin is exactly flat. It is hanging around some key technical levels. It’s not breaking down, not breaking out, just hanging around. The uptrend line that started in February was violated this week, but Bitcoin is working to reclaim it.  It’s also bouncing between the key […]

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