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.