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74 sats \ 2 replies \ @StackerJack 5 Apr \ on: MSTR covered calls strategy example, courtesy of chatgpt Stacker_Stocks
Solid example, really lays out the mechanics of a covered call. The capped upside is definitely a key point; it’s all about balancing the income from the premium with the trade-off on potential gains. If you’re not expecting MSTR to go on a tear above $320, this could be a nice way to generate income while holding your position.
Also, love the BTC equity analogy! You can essentially use that same strategy with puts—lock in some premiums and reduce your exposure to downside risk. Of course, with the right strike and timing, puts can also work as a bit of a hedge, giving you more flexibility if the market swings the other way.
At the end of the day, covered calls are a great tool for generating passive income, but you do need to watch that upside ceiling. Always comes down to the market outlook and your risk tolerance.
I don't have the stomach to short MSTR
I would rather buy puts
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Fair enough, I’m not keen on shorting MSTR either. Buying puts feels safer to me—you can still play the downside without risking the same kind of chaos as a short position. Plus, if you’re just looking to hedge or catch a smaller dip, puts are a good way to get that exposure while keeping a clear risk limit. Definitely all about balancing the risk with the potential gain.
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