STRC Preferred Hits Record Low as Puts Outnumber Calls

Strategy’s Variable Rate Series A Perpetual Stretch Preferred Stock (STRC) closed at $89 on Wednesday after an intraday low of $88.51. The price sits roughly 11% below the preferred’s $100 stated level and the security is down about 10.7% year-to-date. Options traders have positioned more heavily in puts than calls around the security.

Options contracts expiring June 18 showed total put open interest of 8,951 contracts versus 7,906 calls, a put-call open interest ratio near 1.13. Open interest in puts was concentrated at lower strikes, with 1,912 contracts at the $60 strike, 1,230 at $80 and 916 at $85. The options data also showed a theoretical max-pain level of $95 and a net gamma exposure of minus $1.1 million for a 1% move. Negative gamma can prompt dealers to hedge in ways that amplify price moves when the underlying asset falls, depending on trading flows and market depth.

STRC was issued to trade close to par through monthly dividend resets tied to short-term rates. The current discount implies investors require a higher yield to hold the security.

Andre Dragosch, head of research at Bitwise Europe, estimated a dividend nearer $13 annually, about 13% of par, would be needed under current conditions to bring STRC back toward $100. Raising the dividend would increase the company’s cash obligations; leaving the dividend unchanged would maintain lower cash costs but risk a wider discount to par.

Strategy reports holding 846,842 bitcoin, valued at about $54.2 billion at recent prices, and has described those reserves as providing roughly 32 years of dividend coverage based on current estimates. Annual preferred-dividend obligations are about $1.7 billion by the same calculations. Those figures depend on bitcoin’s market price, and preferred dividends must be paid in cash when declared. Bitcoin holdings are not pledged as direct collateral for STRC and can vary sharply in value.

JA Maartunn, a CryptoQuant analyst, 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. In other words, if sustained, it risks becoming a downward spiral.”

Quinn Thompson, chief investment officer at Lekker Capital, noted traders are watching pressure across Strategy’s capital structure and that market participants expect the company to strengthen its balance sheet and liquidity to ease those strains. Singapore-based trading firm QCP observed that bitcoin has traded below $65,000 while other risk assets rose, and market participants are monitoring whether Strategy might sell more bitcoin or issue additional common shares to support preferred-stock obligations.

Strategy has repurchased $1.5 billion of its 2029 convertible senior notes and has raised about $200 million by selling common stock, using proceeds to buy additional bitcoin. Investors continue to track how long the company’s cash runway can support preferred-dividend payments without adding pressure to its financing plan.

Market participants will watch whether the discount to par persists long enough to prompt changes to dividend terms, additional funding actions, or shifts in issuance plans for STRC, and how options positioning affects price moves.