RBC Offers Bet Options On Tesla And MicroStrategy Linked To Bitcoin


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Options traders may currently benefit from a rare divergence in options metrics between the two bitcoin (BTC) holding companies MicroStrategy and You’re here, investment banking strategist RBC Capital Markets suggested.

According to a memo written by Amy Wu Silverman, RBC’s derivatives strategist, shares of both companies rose with the price of bitcoin. However, the asymmetry measuring the cost of bearish option bets – known as put – versus bullish bets – known as calls – is now reversed for MicroStrategy as Tesla is at its highest, has Bloomberg reported on Monday.

“Frankly, it shocks me anytime Tesla’s bias isn’t reversed. However, this presents an opportunity to bet on a bias reversal by selling expensive Tesla puts for Tesla calls out of the money, ”the report cited, citing the strategist.

Specifically, the RBC memo suggested a reversal trade that involved the writing of Tesla put options with a strike price of $ 700 expiring in December and the purchase of calls of $ 930, in prediction that the bias on Tesla options will reverse again.

However, the strategist also added that Tesla’s earnings are expected to be released soon, saying this could be a factor in the proposed options bet.

Tesla has announced that it will report its third quarter results on Wednesday, October 20.

Meanwhile, investment advisor and bitcoin supporter Lyn Alden noted that bitcoin and Tesla were “more correlated than most other assets over the past two years,” but bitcoin has outperformed Tesla since May 2020, helped by the price hike in October.

Like MicroStrategy, Tesla also holds bitcoin on its balance sheet, albeit a smaller amount. In its Quarterly Report, Tesla said that as of June 30, 2021, the book value of their BTC holdings was $ 1.31 billion, which means that on that day they held around 36,420 BTC. It is worth $ 2.26 billion today.

In the first quarter of this year, Tesla sold about 10% of its bitcoin holding, making a profit of $ 101 million, as part of an effort by CEO Elon Musk “to prove the liquidity of bitcoin as an alternative to holding of cash “.

Meanwhile, according to the latest data, MicroStrategy holds a total of 114,042 BTC purchased at an average price of $ 27,713. This stash is worth more than $ 7 billion today.

At 3:10 p.m. UTC, BTC is trading at $ 62,224 and is up 2% in one day and 14% in a week. The price jumped 32% in one month.

Learn more:
– Bitcoin Futures ETF to start testing the market on Tuesday amid withdrawal talks
– Elon Musk should listen to Cathie Wood on Bitcoin

– MicroStrategy Insider Sales Hint Executives May Lack CEO Conviction
– 16 Tweets from the CEO of MicroStrategy and $ 5 billion in Bitcoin, how did BTC react?

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