A divergence in options metrics between Bitcoin-linked Tesla Inc. and MicroStrategy Inc. may present an opportunity, according to RBC Capital Markets.
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Both stocks have gained at a time when Bitcoin has gained due to optimism about approval of a U.S. exchange-traded fund, RBC derivatives strategist Amy Wu Silverman wrote in a note on Saturday. However the skew measuring the cost of bearish options versus bullish ones is inverted for microstrategy while Tesla is at highs, she said.
Frankly, it shocks me anytime Silverman says Tesla isn't inverted skew. However, it does present an opportunity to bet on a skew inversion by selling expensive Tesla puts for out-of-the-money Tesla calls. Then she suggested a risk-reversal trade which involves selling Tesla $700 puts expiring in December and getting 930 calls.
Bitcoin has had a volatile year so far, but is almost double where it started, and closing in on his new high near $65,000 by April. Numerous financial stocks tend to be moving in the same direction as the largest cryptocurrency.
Buying Bitcoin regularly fits MicroStrategy with its Chief Executive Michael Saylor an outspoken crypto bull who frequently uses corporate cash to buy Bitcoin Tesla holds a few Bitcoins on its balance sheet, but is much less connected to the crypto for its corporate fate.
Silverman noted that Tesla's earnings are anticipated soon, which is likely a factor in the option bets as well.
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