Earn $10,600 Weekly with MicroStrategy Covered Call Strategy

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Microstrategy MSTR - $10600 Income weekly

Generating consistent income from the stock market doesn’t have to be complicated. In this blog, we’ll break down how Mark Yegge uses a covered call strategy on MicroStrategy (MSTR) to generate $10,600 per week. This step-by-step guide will show you how covered calls work, how Mark manages his trades, and how you can apply these principles to your own portfolio.

What is a Covered Call Strategy?

A covered call is a conservative options strategy where an investor holds a long position in a stock (or synthetic stock using call options) and sells call options against it to generate income. The premium received from selling calls, also known as the juice, provides a steady stream of income.

Here’s how it works:

Base Position: Own at least 100 shares of a stock (or equivalent using synthetic options).
Sell Call Options: Sell call options with a strike price above the current stock price to collect premiums.
Generate Income: Collect the premium as your income, regardless of whether the stock moves up, down, or sideways.

This strategy is ideal for generating consistent income, particularly in volatile or sideways markets.

Why MicroStrategy?

MicroStrategy (MSTR) has been a preferred stock for Mark due to its volatility and market movement. The stock recently bounced off its 200-day moving average, presenting an opportunity to generate income using covered calls.

Market Conditions: While the broader market remains uncertain, MSTR is showing strength.
Juice Generation: High implied volatility leads to higher premiums, maximizing income potential.
Upside Flexibility: Even if MSTR moves higher, Mark’s covered call strategy ensures profits through collected premiums.

Mark’s Step-by-Step Trade Breakdown

Mark is currently holding 10 synthetic 175 call options that expire in June. Here’s how he structured his covered call trade for the past week:

Choosing the Strike Price:

Mark sold 297.50 calls against his long 175 calls.
These calls were out of the money, providing significant juice without risking immediate assignment.

Premium Collection:

He collected $11,000 from selling 10 contracts at $1,150 per contract.
This income was primarily from extrinsic value, which is the premium above the option's intrinsic value.

Managing the Position:

As MSTR’s price moved above the 297.50 strike price, Mark prepared to roll the contracts.
He bought back the old calls at minimal cost and sold 307.50 calls for the following week, collecting a fresh premium.

Weekly Income Generation:

This rolling trade resulted in $10,600 in premium income for the next week.

Why Rolling the Calls Makes Sense

Rolling calls involves buying back existing call options and selling new ones at a different strike price or expiration date. Here’s why Mark prefers this strategy:

Maximizing Income: By rolling to higher strike prices, he collects more premium without risking losses.
Managing Risk: Rolling ensures that profits are locked in, even if the stock moves against him.
Staying Flexible: If MSTR continues upward, he can adjust accordingly and keep collecting the juice.

Benefits of Using Covered Calls on MSTR

Consistent Income: Generate reliable weekly or monthly income.
Limited Risk: The premium collected cushions against minor price drops.
Capital Efficiency: Using synthetic calls reduces capital requirements compared to owning the stock directly.
Market Neutrality: Profits are earned in up, down, or sideways markets.

Life-Improving Tips for Traders

Stick to the Plan: Develop a clear trading strategy and follow it consistently. Mark’s focus on collecting the juice has allowed him to remain profitable even in volatile markets.
Stay Flexible: The ability to roll options up or down provides adaptability in changing market conditions.
Focus on Income: By concentrating on premium collection rather than stock price predictions, you reduce emotional decision-making.
Keep Learning: Continuously refine your trading skills by studying market patterns and practicing different strategies.

FAQs

What happens if MicroStrategy moves higher than the strike price?
Mark still collects the full premium he received from selling the calls. If the stock moves significantly higher, he can roll the calls to a higher strike price to continue generating income.
Can I apply this strategy to other stocks?
Absolutely. Covered call strategies work well on volatile stocks with strong option premiums. Look for stocks with predictable patterns and reliable liquidity.
How often can I roll my calls?
Most traders, like Mark, roll their calls weekly or bi-weekly to maximize premium income. The frequency depends on market conditions and your comfort level.
Is this strategy suitable for beginners?
Yes! Covered calls are a great way for beginners to generate consistent income while managing risk. However, understanding options basics is essential before starting.
What if the stock drops below my strike price?
If the stock declines, your short call becomes less valuable, allowing you to keep the premium. Your long position may lose value, but the collected premiums help offset losses.

Call to Action

Ready to Start Your Income Generation Journey?

Subscribe to Mark Yegge’s YouTube Channel for ongoing updates and tutorials on covered call strategies.
Join the Free Insider Tips Newsletter to receive actionable market insights and trading tips.
Explore the Cash Flow Machine Program to learn how to create consistent income using the same strategies Mark uses.

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Conclusion

Mark Yegge’s MicroStrategy covered call strategy showcases how traders can generate significant income in uncertain markets. By consistently collecting premiums and rolling his positions, Mark has turned market volatility into a reliable cash flow stream.

If you’re looking to create passive income from the stock market without trying to predict price movements, this strategy might be the perfect fit for you.

Earn $10,600 Weekly with MicroStrategy Covered Call Strategy

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