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Thatโ€™s why I asked. I donโ€™t know. Iโ€™m not a trader.
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๐–‹๐–Ž๐–†๐–™๐–‰๐–Š๐–“๐–Ž๐–Š๐–— (ยฏ`โ—•โ€ฟโ—•ยดยฏ) 1y ago

Oh.

I imagine for every dollar of MSTR they short, they are long 2 dollars of bitcoin.

The only caveat is the cost and how hard is MSTR to borrow, otherwise it looks like a logical trade

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nobody 1y ago

Best risk explanation Iโ€™ve seen. FA/FO - BTC doesnโ€™t play nice always.

โ€œAs the premium widens between #Bitcoinย  and $MSTR, more shorts will be added because of the "risk-free" arbitrage trade. Most conventional funds will go long on Bitcoin and short on $MSTR. However, these shorts will likely get wrecked repeatedly because the momentum on Bitcoin is quite bullish. Once Bitcoin makes a significant upward move, $MSTR will jump even more. This results in short covering, which, in turn, drives the share price even higher.โ€