IA Trade Alert (Patreon)

Disclaimer: The information provided in this trade alert is for educational and entertainment purposes only and should not be considered as financial advice. The author is not a financial advisor and is only sharing their personal trading activities in full transparency. The opinions expressed in this alert are the author's own and do not reflect the views of any other individual or organization. Investing in cryptocurrencies and other financial instruments involves a high degree of risk, and you should not invest money that you cannot afford to lose. Always do your own research and consult with a licensed financial advisor before making any investment decisions. The author is not responsible for any losses or damages resulting from the use of the information provided in this alert. 

I executed the sale of my second tranche of MicroStrategy (MSTR) today, at an exchange ratio of 1.03 MSTR per Tesla (TSLA) share. Prior to year-end, I offloaded 1/40th of my MSTR position. Rem my cost basis on MSTR is in the teens from SLs and call selling so it is a free trade almost - but I do have a pay a lot of LTCG taxes. By the way only 4 times in history has the pair been above 1.03

For every 100 MSTR shares sold, I deployed the proceeds into 3 synthetic long positions on TSLA via options. Not Stock. Specifically, I entered and sold a call and a put for the $280 Strike for a $25 net debit per 100 MSTR shares sold —again, noting this was only 1/40th of my total MSTR holdings. Breakeven on the SL is TESLA to $305 By Mid 2027 - a WHOPPING 835 Days to Expiration. I think I was most of the Vol here today.

Tesla was at $280 and MSTR was at $290 at the time.

In effect, each 100 MSTR shares sold amplified my TSLA exposure by 300 shares through leveraged options. This maneuver accelerates my portfolio rebalancing toward a 50% TSLA weighting, minimizing MSTR divestment while optimizing capital efficiency.

Most critically, the MSTR-TSLA pair breached my trading range ceiling at 1.03, signaling a breakout beyond my predefined pair trading box - see chart above.

Wooohoooo - have a plan, stick to it.