Selling Covered Calls on MARA
Selling covered calls on MARA shares is a good way to generate extra income while holding onto your stock. MARA stock is one of the best short squeeze stocks to buy because MARA could squeeze much higher during the crypto bull run.
It's extremely volatile due to its underlying Bitcoin holdings so it's a great stock to target using this strategy.
I've made quite a few mistakes writing covered calls on MARA stock on the years so I decided to create this guide to help you get started.
How to Sell (Write) a Covered Call on MARA
- Buy at least 100 shares of MARA on any online stock brokerage platform such as Robinhood
- Sell 1 covered call contract for every 100 MARA shares you own
- Collect premium on your shares and wait until the expiration date of the options contract
- RInse and Repeat!
How Much Can You Make Selling Covered Calls on MARA Stock?
It depends on the expiration date of your covered calls and the current volatility of Bitcoin. I prefer selling covered calls when Bitcoin soars in price because MARA covered call premium tends to jump aggressively.
If I sell covered calls expiring with 1 week, you can generate between $20 to $60 per contract.
If you want more options premium then sell covered calls that expire in at least 2 weeks or more.
What Happens If MARA Stock Goes Up and Your Covered Calls Are Already ITM (In the MONEY)?
This is the biggest problem I have when selling covered calls against MARA shares. You have 2 ways to fix the problem:
- Roll your covered calls to a higher strike price
- Buy back the covered calls at a loss
If you don't do anything then your MARA shares will get called away and you will receive the strike price in income.
For example, If I sell a MARA covered call at a strike price of $10 then I will receive an additional $1,000 per 1 covered call when the buyer of my original covered call exercises his option.
