Reddit User’s Catastrophic MSTR Options Loss Highlights Risks of High-Volatility Crypto Proxy Trading

A Reddit user on r/wallstreetbets reported losing over $1 million trading short-dated MSTR call options, including using Canadian registered accounts (FHSA, TFSA, RRSP) for these high-risk trades [11]. Commenters criticized the reckless use of registered accounts (designed for long-term savings) for options trading, noting the user had ignored prior warnings and displayed arrogance in past posts [11]. Some commenters offered encouragement, pointing to the user’s UBC engineering degree (4.0 GPA) and Python/programming skills as assets for rebuilding their career [11].

MSTR functions as a de facto Bitcoin proxy with strong correlation to BTC price movements [1]. The stock experienced a catastrophic 43% crash in October 2025 amid crypto market stress, as institutional traders used it for hedging Bitcoin losses [2]. MSTR has a high beta of 3.37, indicating extreme volatility relative to the broader market [5]. Implied volatility levels for MSTR options ranged from 80-214%, reflecting a high risk premium [4]. Index delisting risks emerged in 2025, with MSCI threatening exclusion due to Bitcoin holdings exceeding 50% of assets [8]. Institutional exposure to MSTR decreased by $5.38 billion between Q2 and Q3 2025 [9]. Bitcoin’s drop from above $126k in early October to low-$80k by November pushed MSTR’s stock price down to $170.50 [8].

The Reddit user’s loss aligns with research findings on MSTR’s extreme volatility: short-dated call options are highly sensitive to price swings and implied volatility changes, both of which MSTR exhibits in spades [2,4]. The commenters’ criticism of using registered accounts for options trading is validated by MSTR’s high-risk profile (Bitcoin correlation, delisting risks) [1,8]. The user’s ignoring prior warnings (per comments) compounded risks from market factors like MSTR’s October crash [11,2].

: MSTR’s continued volatility tied to Bitcoin price movements [1], index delisting risks [8], and ongoing institutional outflows [9] pose significant risks for traders. Using registered accounts for high-risk options strategies (as the Reddit user did) exposes savings to catastrophic losses [11].
: For investors with high risk tolerance, MSTR could rebound if Bitcoin recovers [1]. Traders may benefit from safer strategies like selling options instead of buying calls (as suggested by commenters) [11].