Analysis of Reddit User's Catastrophic Loss Trading Short-Dated MSTR Call Options

On November 22, 2025 (EST), a Reddit user posted about suffering a catastrophic portfolio loss due to repeated trading of short-dated MicroStrategy (MSTR) call options, likely using margin and Canadian registered accounts. The post titled “It’s over for me” indicated the loss wiped out most of their portfolio.

MSTR’s stock price declined sharply from $238.88 (Nov10) to $170.50 (Nov21)—a 28% drop over 10 trading days [0]. This decline is directly tied to a 17% drop in Bitcoin prices (from ~$106k to ~$88k) over the same period [2], as MSTR holds ~649,870 Bitcoin (3.1% of total Bitcoin supply) [3]. The stock’s extreme volatility (90% implied volatility [1]) makes short-dated options risky, as time decay (theta) accelerates near expiration.

MSTR’s negative financial metrics (P/E ratio: -69.17x, net profit margin: -141.24% [0]) and high leverage (14% [1]) suggest ongoing pressure. The company’s liquidity position is weak (current ratio: 0.66 [0]), which may lead to further stock declines if Bitcoin prices continue to fall.

Market sentiment for MSTR is negative, reflected in its 39% monthly drop and 59% annual drop [0]. Short interest stands at 9.74% of the public float [1], indicating bearish investor sentiment.

1. Price Movements
   :
   • MSTR: $238.88 (Nov10) → $170.50 (Nov21) (-28% [0])
   • Bitcoin: ~$106k (Nov10) → ~$88k (Nov20) (-17% [2])

2. Financial Metrics
   :
   • P/E Ratio: -69.17x (negative earnings [0])
   • Net Profit Margin: -141.24% (losing money per dollar of revenue [0])
   • Current Ratio: 0.66 (below 1 → liquidity risk [0])

3. Volatility & Leverage
   :
   • Implied Volatility:90% (expensive options, large expected price swings [1])
   • Debt: $8.244B (amplifies losses when Bitcoin prices drop [1])

• Exact strike price/expiration date of the user’s call options
• Margin percentage used in the trades
• Canadian regulatory rules for margin on options in registered accounts

While analysts have a buy consensus (target price: $517 [0]), current price trends and financials are negative. The user’s loss highlights the risk of combining short-dated options (high theta) with margin (amplified losses) on a volatile asset like MSTR.

• Bitcoin price movements (tied to MSTR’s value)
• MSTR’s debt repayment schedule
• Regulatory changes affecting margin requirements for options
• News about MSTR’s Bitcoin holdings

• Users should be aware that MSTR’s extreme volatility (90% implied vol [1]) and negative financial metrics (P/E -69x, net margin -141% [0]) may significantly impact any options trading, especially short-dated calls with margin.
• This development raises concerns about the risks of using margin for highly volatile assets like MSTR, which warrant careful consideration—margin calls can lead to forced liquidations and total portfolio losses.
• Historical patterns suggest that when a stock with high leverage (14% [1]) and negative margins experiences a sharp price drop, it typically leads to increased margin calls and potential portfolio wipeouts, which users should factor into their analysis.
• MSTR’s weak liquidity (current ratio:0.66 [0]) adds another layer of risk, as the company may struggle to meet short-term obligations if Bitcoin prices continue to decline.

: This analysis is for informational purposes only and does not constitute investment advice. Trading involves significant risk, especially with margin and options. Always conduct thorough research before making financial decisions.
: Not investment advice—for decision-making context only.
: All data from Tier1 (company filings, Bitcoin historical data) and Tier2 (MarketBeat, TradingView) sources. Reddit post is Tier3 (used for event context only).
: High (volatility, leverage, negative financials, margin use).