How In-The-Money Covered Calls Protected My Palantir Trade During a Crash

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When most investors see their stock drop $5 in a day, panic kicks in. But not if you’re using the right income strategy. In this post, we’re diving into how Mark Yegge, the "Cash Flow Machine" coach, managed a sharp pullback in Palantir (PLTR) — and still walked away with profit using in-the-money (ITM) covered calls. You’ll learn what happened, how he protected himself, and how you can apply the same strategy for safe, steady income.

Palantir Rallied… Then Crashed

Let’s set the scene. Palantir had been climbing — recently reaching $146. Mark had an open trade on it with the $138 covered calls, already in-the-money, as part of his conservative strategy. With momentum on his side, he rolled the calls up early to the $142 strike, locking in extra premium (also known as juice). He collected about $5.30 per share, which across his 10 contracts (1,000 shares), netted him $5,300.

Everything looked great — until Palantir dropped over $7 in one day.

Most investors would’ve seen red flashing on their account. But Mark’s trade remained profitable.

The Power of In-the-Money Covered Calls

How did he pull this off?

It all comes down to understanding how ITM covered calls work:

The “in-the-money” amount offers a cushion — protection from downside moves.
When PLTR dropped from $146 to $139, his $142 strike call was already built to absorb that movement.
He’d already locked in $3 in premium — his income — which didn’t disappear just because the stock pulled back.

So while the value of the short call increased against him, the corresponding drop in the long stock position offset that move. It’s a built-in risk management tool baked into the strategy.

That’s why Mark calls the in-the-money zone “the cushion.”

"If the stock goes down, the short call becomes more valuable — and since you're short it, that’s a good thing."
— Mark Yegge

The Juice: Weekly Income That Adds Up

Even with the drop, Mark was still sitting on about $3,000 in premium income from the trade.

Let’s break it down:

$3.00 per share in juice x 1,000 shares = $3,000 income
Weekly trades like this are not uncommon in Mark’s system.
If you rinse and repeat this strategy every week, that’s a potential $150,000/year on a $139,000 account — more than 100% annualized return.

Of course, nothing is risk-free — but Mark’s strategy is about stacking high-probability trades and protecting yourself from market surprises. That’s exactly what happened here.

Key Takeaways from This Trade

Here’s what we can learn:

In-the-Money Calls Offer Built-in Protection

Being $4 ITM gave Mark breathing room. When the stock dropped, he didn’t panic — because the trade was built for it.

Sell the Juice, Not the Direction

This isn’t a strategy based on guessing whether PLTR will go up or down. It’s about creating weekly income regardless of direction.

Manage Conservatively, Roll Strategically

He rolled his calls early, collecting extra juice and giving himself a buffer before the market turned.

It’s Not About Predicting — It’s About Positioning

Mark didn’t need to know the stock would drop. He positioned himself to succeed even if it did.

Life Improvement Tip: Predict Less, Protect More

So many traders obsess over price predictions. But guessing the market is a fool’s game. What if instead, you focused on positioning — being okay if the market goes up, down, or sideways?

That’s the mindset shift the best income traders make.

Instead of praying for price targets, build trades that pay you to wait and protect you when things go wrong. You won’t just make money — you’ll sleep better, too.

Frequently Asked Questions (FAQ)

Q: What is an in-the-money covered call?
A: It’s when you sell a call option with a strike price below the current stock price. It offers less upside, but more downside protection, making it ideal for conservative income traders.

Q: Why not sell out-of-the-money calls for bigger profits?
A: Because they offer no cushion. If the stock drops, you're exposed. ITM calls reduce that risk and help you profit even in flat or falling markets.

Q: What if Palantir keeps falling below the strike price?
A: Mark would roll the position — either lowering the strike price or adjusting the trade to maintain a profit or limit the loss. Active management is key.

Q: Can I use this with cheaper stocks?
A: Absolutely. The principles of selling ITM calls work on almost any stock — just adjust your position size to match your account.

Call to Action

If you’re tired of wild market swings eating away your portfolio, it's time to learn the power of safe, reliable income strategies. Subscribe to my YouTube channel for real-time trade breakdowns and join my free Insider Tips newsletter for updates, tools, and deeper insights into generating weekly cash flow.

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Conclusion:

This Palantir trade is a textbook example of how smart strategy can beat market volatility. While many traders were caught off guard by the sudden $7 drop in Palantir, Mark Yegge’s in-the-money covered call setup not only preserved his capital — it generated income.

Instead of relying on luck or predictions, Mark leveraged the power of structure and risk management. He locked in income from the juice, used the cushion from being in the money, and avoided major drawdowns by design — not by chance.

How In-The-Money Covered Calls Protected My Palantir Trade During a Crash

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