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fiatdenier | 7 months ago (raw) | root | parent | reply | flag 
 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 | 7 months ago (raw) | root | parent | reply | flag +1 
 Best risk explanation I’ve seen.   FA/FO - BTC doesn’t play nice always. 

“As the premium widens between #Bitcoin  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.”
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fiatdenier | 7 months ago (raw) | root | parent | reply | flag 
 Like I said the caveat is how hard or easy it is to borrow the stock to short. 
If it is liquid enough, they can adjust the short/long ratio on the fly and capture the premium. That’s how options traders make billions selling options to noobs. 😁