MicroStrategy sees moderately bullish options activity despite share price drop.

MicroStrategy shares are down 1.95% at $396.10, with moderately bullish activity despite the decline. Options volume is roughly in line with average, with calls leading puts for a put/call ratio of 0.85. Implied volatility is higher by 1.5 points at 54.15, suggesting an expected daily move of $13.51. Put-call skew flattened, indicating a modestly bullish tone.

MicroStrategy (MSTR) shares are down 1.95% at $396.10 in the latest trading session, despite moderately bullish activity. The stock's decline is less than the S&P 500's daily loss of 0.79%, with the Dow falling by 0.94% and the tech-heavy Nasdaq depreciating by 0.92% [1].

The business software company has seen a gain of 7.88% over the previous month, matching the performance of the Computer and Technology sector and outperforming the S&P 500's gain of 5.22% [1]. Investors are eagerly awaiting MicroStrategy's upcoming earnings disclosure, with expectations for an EPS of -$0.12, marking an 84.21% rise compared to the same quarter of the previous year [1].

In terms of valuation, MicroStrategy is currently trading at a Forward P/E ratio of 55.34, indicating a premium compared to its industry's Forward P/E of 27.59 [1]. The Computer - Software industry, part of the Computer and Technology sector, holds a Zacks Industry Rank of 42, placing it in the top 18% of all 250+ industries [1].

The recent changes in analyst estimates for MicroStrategy reflect the shifting dynamics of short-term business patterns. Positive revisions in these estimates convey analysts' confidence in the company's performance and profit potential [1]. The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has a track record of outperforming, with stocks rated #1 producing an average annual return of +25% since 1988 [1]. As of now, MicroStrategy holds a Zacks Rank of #3 (Hold) [1].

Options volume is roughly in line with average, with calls leading puts for a put/call ratio of 0.85. Implied volatility is higher by 1.5 points at 54.15, suggesting an expected daily move of $13.51. The put-call skew has flattened, indicating a modestly bullish tone [2].

The recent surge in MicroStrategy's stock and perpetual preferred shares (STRK, STRF) is fueled by speculation that the company may be included in the S&P 500 index. This speculation is driven by Bitcoin's record monthly close, which boosted MicroStrategy's earnings per share to approximately $39.50, satisfying a key requirement for index inclusion [2].

The REX-Osprey Solana + Staking ETF (SSK) also saw significant activity with a successful first day, closing with $33 million in trading volume. The positive reception helped propel the price of Solana (SOL) up by 4% [2].

Institutional appetite for crypto was further validated by a report from Presto Research, highlighting that BlackRock’s iShares Bitcoin ETF (IBIT) is now on track to generate more annual revenue than its flagship iShares Core S&P 500 ETF (IVV) [2].

References:
[1] https://www.nasdaq.com/articles/microstrategy-mstr-sees-more-significant-dip-broader-market-some-facts-know-0
[2] https://blockchain.news/flashnews/microstrategy-mstr-stock-surges-on-s-p-500-speculation