Microstrategy's real game is gamma not delta

[TheRaizerx]

Man, how tf did I only just find this. The best analysis of mstr so far. Damn interesting and thank you!

[mclaughlin]

I thought this was one of the most useful explanation for the MSTR craze. It made sense what the Gamma traders were doing. Thanks for posting.

[Investingformonkeys]

Thanking my charter for helping me understand Mark’s work here. Living in a country where the financial market is still in the mid 90s of the US is quite tough to keep your head straight about things you learnt.
As usual, keep up the good work.

[samst.germain]

This is too complicated for the crazies to understand. Get ready for the name calling

[cjfeat.]

This video is really for investors with advanced knowledge in finance (esp. derivatives). I don't know how many fully understands what you said. I learned a lot though still I need to digest more. I may come back with questions. Thank you so much!!!

[jc]

I watched this when it first came out and I was drinking the kool-aid. I tried not to listen but it stuck with me. Only two weeks later, these words are now getting louder in my head. I think Mark nailed it here and we are about to see it play out.

[dubyam]

Loved the video. What's missing is that Saylor controls the volatility in Bitcoin to a large degree which I think adds a variable to this that isn't yet appreciated (the issuer with one hand on the convert/ATM tap and the other hand buying massive chunks of an (maybe the first) asset with a truly finite supply). With the proceeds from the converts and ATMs he is able to move the Bitcoin price. He can also manipulate the volatility in the stock by hammering the ATM one day, then announcing a huge BTC buy the next. This is a new sport.

[MonoSolaran]

This is such a great video, and I wish I understood more of it. Would it be possible to create another MSTR explainer video for less-knowledgeable mortals like us who aren't that technical about options?

[farzad_tahamtani]

These great and detailed explanations from Prof. Meldrum gets me super excited for the upcoming complex schedule modeling section of Applied Series.
I hope to get more analyst-style processes to be added to course.

Priceless values and lessons are being taught and given in these videos 🙏🏻

[TheMoralStasis]

Your original pyramid scheme video on MSTR was one of the funniest things I've seen all month. Its even funnier that people attacked you for it. Your analysis is top notch. Can't wait to see you break down how this bubble pops.

[brendonthomas]

A very informative video on gamma vs delta that DEFINITELY highlights what's in it for the convertible bond holders and how said holders utilise short positions on MSTR equity to their benefit.. I do find the exclusion of the amount of naked volatility held just within the underlying asset BTC and the potential for BTC's USD value to increase exponentially over 5 years to be a tad disingenuous. Michael Saylor makes it clear that MSTR stock is not for everyone but those game to exposing themselves to 2/3x the volatility of the underlying BTC.
Masses of retail FOMOing into MSTR at over $400 - $550 with nil research is what gave shorts an easy win.

So what's in it for MSTR longs? The Dec 15th accounting change from balance sheet showing BTC impairment cost to fair value, future inclusion to S&P 500 and Nasdaq 100 that brings guaranteed buy pressure and corporate and national uptake of BTC all bode well.

[dandao]

Mark, have you seen who are buying MSTR's convertible bonds? They're fixed income shop that cannot buy equities nor bitcoin. MSTR is offering them a way to get exposure to bitcoin. Sure, there are some people gamma trading, but that is not the whole case. MSTR offers something for everybody: long equities, short equities, fixed income, volatility, options, gamma, delta. MSTR serves all....that is why it is the most traded stock.

[faitaccompli]

Interesting, I think I'll buy more MSTR.

[Duke-]

The logic makes sense if the value of Bitcoin is stagnant

[Jayshadys]

Dr, what do think will cause the volatility to dry up in BTC and more importantly MSTR? Please do a video with your thoughts.

[darimura]

Matthew, with the new FASB Accounting method due to take effect mid December, MSTR will be able to account for its BTC at current market value. Would this positively affect the price of MSTR?

[nialloconnor]

The most truthful video ever seen. Saylor can deliver volatility for a while. But when it gets boring BOOM, it's all over. Greatest video ever

[Lawofkings]

Thanks for putting an intelligent attempt at understanding the trade, and your explanation of the convertible debt trade is great. Matches what I've been learning from our MSTR bulls.

It sounds like you spent a lot of time explaining why these bonds would be so valuable to bond buyers. If a company can issue a highly in-demand type of convertible bond, to a captive audience, does that add any value to the only company in the world that is currently offering that bond? Or is MNAV of 1 still fair?

If you changed these first principles, how would your analysis change?

1: Bitcoin is actually going to continue doing what it has done since inception, which is suck capital out of the fiat world and increase in value forever.
2: Bitcoin, for the foreseeable future, continues to be very volatile, and MSTR is going to be a higher volatility. Saylor has explicitly advertised "selling vol". This is part of the MSTR thesis, and hardcore bulls are 100% on board with it.

[AlessandroOrlandi]

This explanation was really amazing. Thanks for sharing. I was asking myself what he was doing was too good to be true!

[radier]

Can't MicroStrategy deliberately misprice the bonds to appease gamma trading arbitrage funds? The company needs them for the mNAV premium story to retail. By mispricing, the convex call value graph can be above the short position graph for any share price?

And yes, the company will of course also try to provide volatility for them.