MSTR Soars 4.33% Amid MSCI Exclusion Fears and Bullish Options Flow

Summary
• MSTR surges 4.33% to $165.095, trading above its 52-week low of $155.61
• MSCI’s proposed exclusion of digital-asset-heavy firms sparks $9B demand risk for MSTR
• Options volume spikes 185–8,141 contracts on 12/26 expirations, with 165C and 170C options seeing 66.67% and 65.33% price change ratios

MicroStrategy (MSTR) is trading at its highest level since late November amid a perfect storm of regulatory uncertainty and aggressive options positioning. The stock’s 4.33% intraday gain—despite a 43% YTD decline—reflects a market grappling with MSCI’s potential index exclusion and a surge in bullish options activity. With the 52-week low at $155.61 and a dynamic PE of 4.24, investors are betting on a short-term rebound as the company’s Bitcoin treasury strategy faces existential scrutiny.

MSCI Index Exclusion Threat Sparks Volatility and Short-Term Bounce
The 4.33% intraday rally in MSTR is directly tied to MSCI’s proposed exclusion of companies with over 50% digital asset holdings from its global benchmarks. This move, which could trigger up to $8.8 billion in outflows for MSTR, has created a short-term buying frenzy as investors anticipate forced liquidations and a potential relief rally if the company secures a grandfather clause. The stock’s surge to $165.095—its highest level since November 20—reflects a market pricing in a last-ditch effort by Michael Saylor to reclassify MSTR as an operational software firm rather than a Bitcoin investment vehicle.

Asset Management & Trusts Sector Under Pressure as MSTR Diverges
The Asset Management & Trusts sector, led by BlackRock (BLK), is trading in negative territory with a -0.04% intraday move, contrasting MSTR’s bullish action. This divergence highlights the sector’s broader risk aversion amid regulatory scrutiny of crypto-linked assets. While MSTR’s volatility is driven by its Bitcoin treasury strategy, peers like Fidelity and traditional asset managers are insulated from index reclassification risks, underscoring the unique challenges facing digital-asset proxy stocks.

Bullish Options and Technicals Signal Short-Term Rebound Potential
• 200-day MA: $325.53 (far below current price)
• RSI: 38.69 (oversold territory)
• MACD: -17.18 (bearish) vs. Signal Line: -18.52 (bearish)
• Bollinger Bands: $158.09–$194.22 (current price near lower band)

MSTR’s technicals suggest a short-term rebound is likely as the stock trades near its 52-week low. The RSI at 38.69 indicates oversold conditions, while the MACD histogram shows a narrowing bearish gap. Key support/resistance levels at $169.96–$171.63 (30D) and $324.93–$330.88 (200D) suggest a test of the $165–$170 range is imminent. The options chain reveals aggressive bullish positioning: the MSTR20251226C165 and MSTR20251226C170 call options are top picks due to their high leverage ratios (28.97% and 47.18%) and moderate deltas (0.525 and 0.383).

• MSTR20251226C165
- Strike: $165, Expiry: 12/26, IV: 57.01%, Leverage: 28.97%, Delta: 0.525, Theta: -0.764, Gamma: 0.0286, Turnover: $1.58M
- IV: High volatility implies strong price sensitivity; Leverage: Amplifies gains on a 5% move; Delta: Moderate directional exposure; Theta: Aggressive time decay; Gamma: High sensitivity to price swings
- This option stands out for its high leverage and gamma, ideal for a 5% upside scenario where payoff = max(0, $173.35 - $165) = $8.35 per contract. With $1.58M turnover, liquidity is robust.

• MSTR20251226C170
- Strike: $170, Expiry: 12/26, IV: 56.00%, Leverage: 47.18%, Delta: 0.383, Theta: -0.634, Gamma: 0.0279, Turnover: $2.96M
- IV: Mid-range volatility; Leverage: Highest in the chain; Delta: Lower directional risk; Theta: Moderate time decay; Gamma: Strong sensitivity to price movement
- The 170C offers the highest leverage (47.18%) and $2.96M turnover, making it a top-tier play for a 5% upside. Payoff = max(0, $173.35 - $170) = $3.35 per contract, with a 47% return on premium paid.

Aggressive bulls should consider MSTR20251226C170 into a break above $170, while conservative buyers may target MSTR20251226C165 for a $165–$170 range trade.

Backtest Strategy Stock Performance
The backtest of MicroStrategy (MSTR) after an intraday surge of at least 4% from 2022 to the present shows favorable short-to-medium-term performance. The 3-day win rate is 54.75%, the 10-day win rate is 56.61%, and the 30-day win rate is 56.40%, indicating a higher probability of positive returns in the immediate aftermath of such events. The maximum return during the backtest was 20.22%, which occurred on day 59, suggesting that there is potential for significant gains following the 4% surge.

MSTR’s Fate Hinges on MSCI Decision—Act Before 1/15
MSTR’s 4.33% rally is a short-term bounce amid a high-stakes regulatory standoff. The stock’s technicals and options flow suggest a near-term test of $165–$170, but sustainability depends on MSCI’s January 15 decision. If excluded, outflows could accelerate in February; if spared, a relief rally may follow. Watch BlackRock (BLK -0.04%) for sector sentiment cues. Investors should prioritize MSTR20251226C170 for a 5% upside play and monitor the $165 support level. The next 20 days will define MSTR’s path forward—act decisively.