Turning a 40% Loss into a Profit Using Covered Calls: The MicroStrategy Case Study
In the stock market, most people panic when their positions start bleeding red. But not Mark Yegge. Through smart planning, discipline, and a well-structured covered call strategy, Mark turned a 40% unrealized loss on MicroStrategy (MSTR) into a $25,000 net profit — and counting.
Let’s unpack this transformation and the powerful principles that made it possible.
The Backstory: A Tough Start
Mark entered his MicroStrategy position in November when the stock was trading around $477. It briefly surged to $543, only to collapse the same day. What followed was a brutal descent all the way to $217, with the stock currently sitting around $317.
Had Mark simply held his LEAPS through this downturn, he would’ve been staring at a 40% loss.
But he didn’t.
The Strategy: Covered Calls with High Delta LEAPS
Mark used his Cash Flow Machine™ strategy to defend and rebuild his position.
Step 1: Buy Deep In-the-Money LEAPS
- Initially bought long-dated LEAPS at the 250 strike.
- Later rolled to 175 strike LEAPS, deeper in-the-money, to increase delta (~0.90) and reduce cost.
Step 2: Sell Weekly Covered Calls
- Every week, Mark sold deep in-the-money call options against his LEAPS.
- Focused on capturing extrinsic value (“the juice”), not price prediction.
“Even though the base position was down, the premium income kept flowing,” Mark explains.
The Results: From Red to Green
Here's the breakdown:
- Base Position Cost: $311,832
- Current Base Value: $178,200
- Total Income from Sold Calls: $158,582
- Net Walk-Away Profit: $25,000
Instead of taking a crushing loss, Mark is now up about 10% overall — during one of the most volatile markets in recent memory.
And that’s with the stock still down significantly from where he entered.
Key Takeaways for Investors
- Selling Covered Calls Can Rescue Losing Trades
By selling weekly calls, Mark generated steady income that offset the drop in asset value. It didn’t stop the decline — but it cushioned it.
- Focus on “Juice,” Not Prediction
Mark doesn’t try to guess where the stock is going. His primary goal is to collect weekly income, regardless of market direction.
- High Delta LEAPS Offer Stability
By holding LEAPS with delta near 0.90, Mark ensured that his long position moved almost dollar-for-dollar with the stock, providing base stability.
- Stay in the Game with a Plan
Even during painful drawdowns, the Cash Flow Machine system kept him engaged — and profitable.
FAQs
Q: Isn’t selling calls limiting upside?
A: Yes — but it also protects the downside. Mark prefers consistent weekly income over chasing unpredictable rallies.
Q: What happens if the stock moves over the strike price?
A: No big deal. Mark’s base gains offset any loss on the call. He simply rolls the call forward.
Q: Is this approach only for big investors?
A: No. The strategy scales well. Whether you're trading 1 contract or 100, the principles are the same.
Life-Improving Trading Tips
- Master one strategy instead of trying every shiny new tactic.
- Think in terms of systems, not single trades.
- Define your walk-away plan — don’t wait until panic forces your hand.
- Track your progress using spreadsheets or trade journals to stay accountable.
Call to Action
Tired of letting the market decide your fate?
Check out the Cash Flow Machine Elite Course to learn how you can earn 2–4% per month in any market.
Join the free Insider Tips Newsletter for trade breakdowns, strategy insights, and weekly inspiration.
Subscribe to Mark Yegge’s YouTube Channel for real-time updates and walkthroughs like this one.
Conclusion
Mark didn’t beat the market by guessing right. He succeeded by using structure, discipline, and weekly income generation to control risk and create consistent profit — even in a stormy market.
If you’re sitting on losses or worried about volatility, it’s not too late. You don’t have to get lucky. You just have to get smart.
