Convertible Arbitrage: A Smart Play on #micostrategy $MSTR?
Here’s how you can exploit inefficiencies in MicroStrategy (MSTR) convertible bonds & stock:
1. Buy MSTR Convertible Bonds
• Earn interest & gain exposure to stock through the bond’s conversion option.
2. Short MSTR Stock
• Hedge stock risk by shorting shares equal to the bond’s “delta” (e.g., short 7 shares for a bond with delta = 0.7).
3. Profit from Arbitrage
• You collect bond interest & profit from pricing discrepancies between the bond and stock.
Risks:
• Borrowing costs for shorting.
• Illiquid bonds.
• Imperfect hedges from delta changes.
Done right, this strategy extracts a risk-adjusted premium from market inefficiencies. A classic convertible arbitrage move! nostr:note1mxwl33ec0shh287muansmlstw8sflw852sat8xulpadqlxxnzk9s6vtcgv