How I’m Generating $12K in Income from MicroStrategy This Week

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If you’ve been following my updates, you know I like to share what’s happening in my account to help you understand how I generate reliable income from the stock market. Today, I’m breaking down how I’m making $12,000 this week from MicroStrategy (MSTR) using my covered call investing strategy. Let’s dive in.

MicroStrategy’s Big Move

This week, MicroStrategy is experiencing significant upward momentum. Looking at the chart, the stock had a solid green candle today, climbing $20 to reach $320. This is a sizable move, but as someone who implements covered call strategies, I don’t just profit from stock price increases—I profit from the “juice.”

By “juice,” I mean the time premium in options pricing. Selling options with a good amount of time premium allows me to generate consistent income regardless of market conditions.

The Trade Setup

Here’s how I set up my trade:

A Few Days Ago:

I sold the 307.50 strike calls against my 175 calls for just one or two days.
I received $744 per contract for this short trade.

Today:

With MicroStrategy’s price surging above $320, the stock is now well over my 307.50 strike price.

Some might think this means I’m losing money because the stock price has gone beyond my sold call strike price. But that’s not the case!

Understanding the “Cost of Working Capital”

When the stock price rises above the strike price of your sold call, you may need to buy it back at a higher price. For example, in this trade:

I initially sold the calls for $744 per contract.
The market now values these calls at $1,390 per contract.

On the surface, it might look like I “lost” $646 per contract ($1,390 - $744). However, that’s not the whole picture.

Here’s why:

The $744 I earned from selling the calls was mostly time premium (juice).
The additional cost of buying back the calls is just the intrinsic value, not a true “loss.”

Ultimately, my profit from this trade is the difference between the premium I collected and the time value remaining on the option. This is why I always emphasize the importance of understanding options pricing and premium decay.

Rolling the Calls to Maximize Profits

Since the stock price continued to rise, my next move was to roll the 307.50 calls to a higher strike price for next week. Here’s how it worked:

Closing the Current Position:

I bought back the 307.50 calls for around $1,390 per contract.

Selling New Calls for Next Week:

I sold 320 strike calls for next week, collecting $1,490 per contract in premium.

This “roll-up” strategy not only resets my trade to a higher strike price but also allows me to pocket additional premium.

The Bigger Picture: Consistent Income from a Falling Stock

You might wonder: How can I make money even when the stock price fluctuates?

Here’s the reality: MicroStrategy’s stock has dropped 50% from its highs of $543 just five weeks ago. Despite this, my trading system has allowed me to stay profitable by:

Selling in-the-money calls to protect my account during the decline.
Capturing time premium (juice) every week to offset potential losses.

Even now, with the stock rebounding, I’m earning $1,490 per contract this week. Multiply that by my eight contracts, and that’s nearly $12,000 in income in just one week.

Why My Strategy Works

The key to my success lies in having a well-defined system with clear rules. Here’s what I focus on:

Risk Management:

My trading plan ensures I can adjust my positions when the market or stock moves against me.

Consistent Income:

By selling weekly options, I generate 2-4% income per month, even in volatile markets.

Focus on Time Premium:

I prioritize trades with high time premium, which decays over time and adds to my profits.

Adapting to Market Conditions:

Whether the market is bullish, bearish, or neutral, I adjust my strategies to align with the current environment.

Life-Improving Tips for New Traders

If you’re new to options trading or covered calls, here are some tips to help you succeed:

Educate Yourself:

Learn the basics of options, including terms like “strike price,” “premium,” and “time decay.”

Start Small:

Begin with one or two contracts to get a feel for the strategy before scaling up.

Follow a System:

Develop or adopt a trading system with clear rules for entry, exit, and adjustments.

Manage Emotions:

Don’t panic if a trade goes against you. Use the “roll-up” strategy to stay in control.

Focus on Income, Not Predictions:

You don’t need to predict stock prices perfectly. Instead, focus on capturing consistent income.

FAQ

Q1: What happens if the stock price drops significantly?
If the stock price falls, I sell in-the-money calls to protect my account and generate income. This offsets some of the losses from the stock’s decline.

Q2: How do you choose which strike price to sell?
I base my decision on market conditions, volatility, and my trading plan. For volatile stocks like MicroStrategy, I often sell at-the-money or slightly in-the-money calls.

Q3: Is this strategy risky?
Like any investment, there’s risk involved. However, by following a structured system and managing positions, the risk is controlled.

Call to Action

Want to learn how to generate reliable income like this? My Cash Flow Machine system can teach you how to create 2-4% monthly returns using covered calls. It’s designed for both new and experienced traders and takes less than an hour a week to implement.

Get started today

Conclusion

This week’s MicroStrategy trade is a great example of how I generate consistent income from the stock market, even in volatile conditions. By focusing on time premium, rolling my positions, and following a proven system, I’m able to stay profitable regardless of market direction.

How I’m Generating $12K in Income from MicroStrategy This Week

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