MicroStrategy stock (MSTR) has been in a major down trend since November.
MSTR stock is down 70% from its all-time high and 50% in the last three months.
The stock declined 8.14%, and based on the options flow, this bearish momentum appears far from over.
Let's break down the unusual options flow and what it might signal about the stock's potential direction.
Options Volume and Flow Analysis
Yesterday's options activity in MicroStrategy stood out from typical trading patterns. The unusual volume and flow indicate potential bearish sentiment among sophisticated options traders.
Specifically, we saw:
$223.79m in bearish flow vs $116.22m bullish flow – almost a 2:1 bearish bias.
Massive deep ITM put positions:
- $250 Put (December 19th, 4 DTE): $70.39M premium, delta -0.9774.
- $400 Put (January 2026, 32 DTE): $50.45M premium, delta -0.9845.
- $400 Put (January 2026, 32 DTE): $49.62M premium, delta -0.9845.
- $400 Put (January 2026, 32 DTE): $49.53M premium, delta -0.9718.
- $420 Put (January 2026, 32 DTE): $40.26M premium, delta -0.9851.
- $420 Put (January 2026, 32 DTE): $39.93M premium, delta -0.9869.
Technical Picture
MSTR has been in a persistent downtrend, trading below its 21-day, 50-day, and 200-day moving averages.
The stock closed at $162.08, significantly below the 50-day moving average at $238.76 and the 200-day moving average at $327.28, reinforcing its bearish trend. The 21-day moving average at $189.67 is acting as near-term resistance.
MSTR saw a 25.05M volume day, elevated volume suggesting significant selling pressure.
The Accumulation/Distribution line remains weak, indicating continued distribution by institutions.
Support is around $160, while resistance is at $190 (21-day moving average). A break above this could signal a potential trend reversal.
With the stock trading well below all major moving averages and showing persistent weakness, MSTR appears deeply oversold. However, the overall trend remains bearish unless it reclaims key moving averages.
Trading Implications
The combination of the bearish options flow sentiment and technical breakdown presents a compelling case for option traders to consider bearish option strategies.
The technical setup for MSTR remains bearish, and today's options flow further confirms a negative bias.
The options market reflects significant bearish sentiment.
There is heavy put activity, particularly in strikes ranging from $250 to $420, with large premium trades on contracts expiring in December and January.
Notably, high open interest and volume on deep in-the-money puts suggest hedging or outright speculative bearish positioning.
Implied volatility is also elevated, indicating increased demand for downside protection.
Given this setup, traders should be cautious of further weakness.
A break below $160 could trigger additional selling pressure, while a short-term bounce may face resistance at $190.
Those looking to trade options might consider bear put spreads or selling call credit spreads to capitalize on continued bearish momentum.
Company Details
MicroStrategy is a business intelligence company that has transformed into a corporate Bitcoin treasury strategy. The company holds one of the largest corporate Bitcoin holdings in the world, making its stock highly correlated to Bitcoin price movements. MicroStrategy also provides enterprise analytics and mobility software solutions to organizations worldwide.
MicroStrategy rates as a Strong Buy according to 12 analysts with 1 Moderate Buy rating and 2 Hold ratings.
Please remember that options are risky, and investors can lose 100% of their investment.
This article is for education purposes only and not a trade recommendation. Remember to always do your own due diligence and consult your financial advisor before making any investment decisions.
On the date of publication, Gavin McMaster did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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