How I Made $40,000 in 6 Months with My MicroStrategy Covered Call Strategy

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In the world of income investing, few trades have taught more real-life lessons than my recent 6.5-month journey trading covered calls on MicroStrategy (MSTR). Despite extreme volatility, platform hiccups with Schwab, and a 40% price drop in the underlying asset, I managed to close the trade with a $40,000 profit on a $250,000 investment. This wasn’t by chance. It was by design.

This blog outlines the step-by-step breakdown of how I managed risk, leveraged extrinsic value, stayed in the money, and turned a rollercoaster of a stock into a consistent income stream.

The Setup: Entering the Trade The strategy began on November 20, 2024, with a position of five synthetic contracts on MSTR. As the price fluctuated wildly, dropping from $543 to $220, I stuck to my rule-based approach, adding contracts during dips to ultimately grow my base to 13 contracts.

Investment Total: ~$250,000
Time in Trade: 6.5 months
Profit: $40,000 (Net of losses on the base position)

Why I Left Schwab (and You Might Want to Too) While this blog focuses on the trade itself, I can’t ignore the catalyst for exiting the position: poor practices at Schwab. Between hidden commissions, manual sweeps for money markets, and lack of transparency on order flow, I felt it was time to walk away. Always evaluate your brokerage’s policies.

The Covered Call Engine: Base and Non-Base Positions My trading setup separates the core position (synthetic long calls) from the income side (selling calls).

Base Position: Where I mimic owning the stock via long calls.
Non-Base (Income) Positions: Where I sell calls against my base to collect weekly juice.

Juice = Extrinsic Value (Time premium you keep regardless of price movement)

I lost $84,000 on the base due to MSTR’s drawdown. But the real win came from selling calls: I generated $124,000 in income, locking in a net profit of $40,000.

Why the Income Worked Even When the Stock Dropped 40% The secret? I stayed in the money.

When a stock drops, deep in the money options offer downside protection. I collected high premiums while giving up capital gains – and that’s perfectly fine. This is not a capital gain strategy; it’s a cash flow strategy.

I didn’t care that MSTR dropped. I cared that the juice kept coming.

Despite fears of assignment, I never got assigned over dozens of trades. Most of the time, I was in the money, and yet my trades rolled seamlessly week after week.

Lessons Learned: The Core Takeaways

Juice is King: Every trade was built around collecting extrinsic value, not betting on price movement.
Rolling Is the Real Game: I didn’t let options expire. I rolled forward, up or down as needed.
In the Money Offers Protection: During drawdowns, deep ITM calls provided a buffer.
Assignment Isn’t a Death Sentence: I never got assigned, but even if I had, it’s often a max profit scenario.
Treat Covered Calls Like Real Estate: Your stock is your rental property. The option premium is your rent.

FAQ: Covered Call Strategy on MicroStrategy

Q: Isn’t getting assigned a big risk?
No. It rarely happens. And if it does, you can buy the shares back and keep going. You still made your max profit.

Q: Why not just buy and hold the stock?
Because then you're subject to drawdowns with no income. Covered calls provide weekly or monthly cash flow regardless of price direction.

Q: Isn’t this a lot of work?
It’s about 20 minutes a week. Once you understand the process, it’s mechanical.

Q: Can this work with smaller accounts?
Yes. You can start with as little as 100 shares or use spreads to simulate the strategy on a smaller scale.

Life-Improving Tip

Stop thinking of your portfolio like a retirement account and start treating it like a business. Your stocks are the assets. The options you sell are the cash register. Create a habit of weekly income and you’ll shift from hope to control—and from stress to security.

Call to Action

Are you ready to stop speculating and start generating reliable income from your portfolio?

Join my Free Masterclass on Covered Calls
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You don’t have to gamble to grow. You just need the right strategy. Let’s build your Cash Flow Machine.

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Conclusion

The Power of Cash Flow Over Capital Gains Making $40,000 in six months on a declining asset isn't magic—it's the power of in-the-money covered calls. If you understand how to use time premium to your advantage, you can build consistent income even in volatile markets.

The MicroStrategy trade proved this system works. It wasn't perfect, and I made mistakes. But sticking to the plan, focusing on juice, and avoiding emotional decisions made all the difference.

How I Made $40,000 in 6 Months with My MicroStrategy Covered Call Strategy

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