Options Turn Bearish on Strategy’s STRC After Record Low

Strategy’s Variable Rate Series A Perpetual Stretch Preferred Stock (STRC) closed at $89 after an intraday low of $88.51, about 11% below its $100 stated level. The preferred has declined about 10.7% year to date.

Options contracts expiring June 18 showed 8,951 put contracts and 7,906 call contracts, giving a put-call open interest ratio of about 1.13. Large clusters of open interest sit at the $60 strike (1,912 contracts), the $80 strike (1,230) and the $85 strike (916). The options data also showed a max-pain level of $95 and net gamma exposure of negative $1.1 million for each 1% move in STRC’s price.

Negative net gamma means dealers may hedge in ways that can amplify price moves when a security falls. Market participants warned that the current options setup could raise volatility if selling accelerates.

Andre Dragosch, head of research at Bitwise Europe, estimated a $13 annual dividend would be needed to return STRC to $100 under current market conditions. He noted that a higher dividend would increase cash obligations, while leaving payouts unchanged would preserve cash but risk a wider discount.

Strategy holds 846,842 BTC, valued at about $54.2 billion at recent prices. The company reports those holdings provide 32 years of preferred dividend coverage at current market values. On paper, annual preferred-dividend obligations total about $1.7 billion, but dividends must be paid in cash when declared and the BTC reserves are not pledged as direct collateral to STRC investors.

JA Maartunn, an analyst at CryptoQuant, warned: “If Strategy had to sell BTC to cover those dividends, it would create selling pressure that could push BTC prices lower. That, in turn, would reduce the value of its BTC reserves and shorten the very dividend coverage it’s highlighting.”

Quinn Thompson, chief investment officer at Lekker Capital, observed pressure across Strategy’s capital structure will likely continue until the company improves its balance sheet and liquidity. Trading firm QCP pointed to Strategy’s repurchase of $1.5 billion of 2029 convertible senior notes and subsequent common-stock sales as contributing to investor overhang. Strategy has sold roughly $200 million of common stock and used proceeds to buy more Bitcoin.

Analysts note the options positioning and STRC’s discount to par could constrain the company’s use of the preferred for financing Bitcoin purchases. If the discount persists, the company may alter dividend mechanics or seek alternative financing.