Understanding MSTR Yield Instruments

We have seen an explosion in new instruments associated with Strategy (MSTR), and today I want to explore my thoughts around the risks & opportunities for MSTY, STRK, STRF, and 2x leveraged ETFs.

G’day Folks,

If you have been paying attention to the market dynamics around Strategy, you may have noticed a suite of new instruments issued either by the company itself, or via issuers using ETF wrappers. Wrapping your head around MSTR is enough of a challenge, let alone coming to terms with a bunch of derivative instruments.

The Bitcoin treasury strategy was pioneered by Strategy (MSTR), and their primary product is securitised volatility. The volatility premium of 78% baked into MSTR options exceeds that of the Mag-7, and even Bitcoin (+48%), suggesting there is no shortage of supply for their product.

MSTR Implied Volatility Comparison | from Strategy Charts

As I explored in The Infinite Money Glitch, the product that Strategy produces is distilled volatility, and their customers are investors of all shapes and sizes, each with a specific risk tolerance.

This report will be focused on a summary analysis of several instruments associated with Strategy, covering their performance, dividend yields, risks, and opportunities. I will analyse:

• A quick market update for Bitcoin, now that we’re trading back above $100k.

• The two Strategy issued, yield bearing preferred stocks (STRK & STRF)

• The two 2x Leveraged Long MSTR ETFs (MSTX & MSTU)

• The high income producing covered call ETF (MSTY)

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📈 Reminder: you can find the charts from our articles on the Checkonchain Charting Website, and a guide in our Charts Tutorial Video.

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