Tesla Rockets Higher: Learn How I Made $28,000 in 7 Days

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Tesla's recent stock surge has left many wondering how to handle deep in-the-money positions, especially in an uptrending market. In this blog, we’ll explore how Mark Yegge navigated Tesla’s rapid price movement, used strategic roll-ups, and generated $28,000 in income in just seven days—all while maintaining a cushion against market volatility.

Deep in the Money and Thriving

Mark’s Tesla position was deep in the money, with 390 calls that had gained significant value as Tesla’s price surged to $438. Being deep in the money might seem problematic to some traders, but it offers unique benefits:

Intrinsic Value as Protection: The in-the-money amount provides a cushion against stock price drops.
Juice Collection: Even in-the-money options still have extrinsic value, allowing traders to collect income while maintaining downside protection.

Mark explains that despite being deep in the money, he hasn’t been assigned or exercised on his calls, a common misconception among new options traders.

The Power of Strategic Rolling

Rolling is a crucial tool in managing options positions, and Mark demonstrates its effectiveness in an uptrending market.

Why Roll?

Capture New Juice: Rolling allows you to lock in profits from expiring options and sell new options with fresh extrinsic value.
Adapt to Market Movements: By adjusting strike prices and expiration dates, you can align your position with current market conditions.

In this case, Mark sold 390 calls for $14 per contract and bought them back for just $5, capturing significant income. However, with Tesla’s continued rise, he needed to roll his position to avoid being overly exposed.

How Mark Rolled His Tesla Calls

Step 1: Raised Cash by Adjusting Base Positions

Mark shifted some long-term positions to generate cash for rolling.

Step 2: Selected a New Strike Price

He chose to roll up from 390 to 420, which is closer to Tesla’s current price but still in the money.

Step 3: Sold New Calls for $6 Extrinsic Value

Selling 45 contracts of 420 calls brought in approximately $28,000 in juice for the week.

Why Mark Didn’t Roll All the Way Up

When deciding how far to roll up, Mark opted not to move fully to at-the-money or out-of-the-money strikes. Here’s why:

Maintain Cushion: Keeping the 420 strike ensures that the position is still protected against a potential price drop below $420.
Market Uncertainty: With a long weekend and potential market volatility ahead, staying in the money minimizes risk.
Income Optimization: Even slightly in-the-money strikes offer significant juice without exposing the position to unnecessary risk.

Juice Breakdown: $28,000 in a Week

Here’s how the juice added up:

Extrinsic Value: $6 per contract
Number of Contracts: 45
Total Juice: 45 x $6 x 100 = $28,000

This income was locked in regardless of Tesla’s movement during the week, demonstrating the power of selling options for consistent cash flow.

Key Takeaways from Mark’s Tesla Trade

Be Adaptable: Markets change, and rolling positions allows you to stay in control and capture new opportunities.
Focus on Juice: Extrinsic value is your primary source of income, so prioritize trades that maximize juice.
Don’t Fear In-the-Money Positions: They provide valuable protection and income, even during volatile market conditions.
Use Caution in Trending Markets: Avoid overextending your roll-ups in green markets to maintain downside protection.

Life-Improving Tips from Covered Calls

Stress-Free Trading: With a system in place, you can manage your portfolio without emotional decision-making.
Consistent Cash Flow: Generate income week after week, regardless of market direction.
Financial Freedom: Use your trading income to support your lifestyle, whether it’s travel, hobbies, or early retirement.
Risk Management: In-the-money positions and rolling strategies help protect your portfolio from significant losses.

Frequently Asked Questions (FAQs)

Why didn’t Mark roll his Tesla calls to at-the-money strikes?
Mark prioritized maintaining a cushion with in-the-money strikes to protect against potential price drops.
How does rolling generate income?
Rolling involves closing an existing options position and opening a new one with a different strike or expiration. The new position generates fresh extrinsic value, or juice, for income.
What happens if Tesla drops below $420?
The intrinsic value of the 420 calls will decrease, but the juice collected provides a buffer against the loss.
Can I roll options with a small account?
Yes, rolling is a scalable strategy. Even with fewer contracts, you can generate consistent income and manage risk.

Call to Action

Want to learn how to generate $28,000—or more—in just seven days? Here’s how you can get started:

Get started today

Conclusion

Mark Yegge’s Tesla trade highlights the power of covered call strategies and rolling techniques for generating substantial income, even in volatile markets. By focusing on juice, managing risk, and adapting to market trends, you can achieve consistent cash flow and long-term portfolio growth.

Tesla Rockets Higher: Learn How I Made $28,000 in 7 Days

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