How I Made $104,000 with Covered Calls on MicroStrategy (MSTR)

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In the ever-volatile world of trading, mastering the art of options strategies like covered calls can make all the difference. As Mark Yegge demonstrates in his recent MicroStrategy (MSTR) series, generating consistent income—even when markets are down—is all about focusing on “the juice.” Let’s break down his approach and insights, which resulted in over $104,000 in income within a month.

A Two-Part Strategy: Trade Closure and The Math

Yegge starts by closing out his 400-strike covered call on MicroStrategy. With the market down significantly—nearly 1,100 points in one day—many traders were scrambling. However, Yegge’s strategy remains steady. His focus isn’t on short-term price movements but on the consistent extrinsic value (the “juice”) that covered calls provide.

Despite MicroStrategy trading lower than the initial entry point, Yegge had already collected significant income from premium decay. By closing his position two days before expiration, he locked in $19,700 from this trade alone, securing over 90% of the available premium.

Why “The Juice” Matters

The concept of “juice” is central to Yegge’s philosophy. In options trading, the juice refers to the income generated from selling options. Whether the market is up or down, focusing on collecting this extrinsic value helps minimize losses and compound gains over time.

For instance, even though the stock price dropped $120-$130 from its initial level, Yegge continued to generate substantial income by actively managing his trades, rolling positions, and strategically buying back options early.

The Power of Synthetic Positions

Yegge’s core position involved synthetic long calls—deep-in-the-money options with a long expiration (184 days). These synthetics mirror owning the stock while requiring less capital. With his base position secured, he wrote shorter-term covered calls to generate income.

This combination of a long synthetic position and short-term covered calls allowed him to stay flexible. If the stock moved against him, he had time to adjust. If the stock stayed flat or slightly rose, he profited from the consistent decay of option premiums.

The Math: A Month of Success

To provide full transparency, Yegge compiled a spreadsheet summarizing his trades from November 18 to December 19. Here’s how the numbers broke down:

Base Position Cost: $223,000 for 8 synthetic contracts (800 shares equivalent).
Income from Short-Term Calls: Regularly selling covered calls brought in over $104,000 in premium income.
Adjustments and Flexibility: Even after accounting for occasional roll-ups or roll-downs, Yegge’s strategy remained profitable due to disciplined risk management.

One notable trade involved selling five 400-strike calls for $52,000 in premium. As the stock price declined, he bought back the calls for $19,700, locking in significant gains.

FAQ: Common Questions About Covered Calls

Q: What is a covered call?
A: A covered call is an options strategy where you sell a call option against a stock or synthetic position you own, generating income from the option’s premium.

Q: What happens if the stock price rises above the strike price?
A: If the stock rises above the strike price, your shares may be called away (sold) at the agreed strike price. However, you keep the premium income earned when selling the call.

Q: Are synthetic positions risky?
A: Synthetic positions require less capital than owning shares outright, but they carry risk if the stock moves significantly against you. Effective risk management is crucial.

Q: How do you decide when to close a position?
A: Closing positions early, especially when 80-90% of the premium has been earned, is a common practice to lock in profits and reduce risk exposure.

Life-Improving Tips from Options Trading

Build a Routine of Discipline: Options trading requires a disciplined approach, which can translate to better decision-making in other areas of life.
Focus on Steady Gains: Rather than chasing big wins, aim for consistent income. This principle applies to financial stability as well.
Adaptability Is Key: Markets, like life, are unpredictable. Learning to adjust your strategy during challenges can make you more resilient.
Track Your Progress: Maintaining records of your trades, successes, and mistakes teaches accountability and promotes continuous learning.

Call to Action

Take Your Trading to the Next Level

If you’re ready to unlock the power of covered calls and generate consistent income, now is the time to act!

Join Mark Yegge’s Live Stock Analysis Sessions every Wednesday at 6:30 PM EST and learn the strategies that helped him generate $104,000 in just one month.

Get started today

Conclusion

Trading isn’t about predicting where the market will go next; it’s about positioning yourself to profit regardless of direction. Mark Yegge’s MicroStrategy series highlights the power of options strategies like covered calls, showing how discipline and a focus on the “juice” can lead to consistent success.

How I Made $104,000 with Covered Calls on MicroStrategy (MSTR)

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