Generate Income on MSTR Without Owning The Stock (Yet)

OPTIONS TRADING open book on table by One Photo via Shutterstock With Bitcoin (BTCUSD) reaching a new all-time high, investors are interested in crypto stocks to ride the wave up. One of the most popular is Strategy Inc. (MSTR), formerly Microstrategy. The company ostensibly offers cloud-based and on-site enterprise analytics software, however, they are better known for their aggressive Bitcoin accumulation strategy, having transformed itself into a de facto Bitcoin holding company.

Over the last 30 days, MSTR’s stock price rose 12.26%****. Zooming out a little, and the stock is up nearly 220% over the last year.

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These explosive moves make it an attractive choice for traders looking to generate income while waiting for a pullback And one excellent way to do that is by selling cash-secured puts.

What Are Cash-Secured Puts?

A cash-secured put is an options strategy that involves selling a put option on an underlying asset to earn premium while setting aside enough capital to buy the shares should you get assigned

Selling cash-secured puts can be a clever way to earn additional income in bullish markets. Should markets transition to slightly bearish, investors will purchase the underlying at a discount (the strike price) from when the trade was initially opened.

As a result, the goal is for the put option to expire worthless and unassigned - this happens when the stock trades above the strike at expiration.

By selling cash-secured puts, you’re getting paid to wait for an ideal entry point.

However, you will need to have enough cash to cover 100 shares of the stock should you get assigned, hence the “cash-secured” part of the strategy

Selecting Strike Prices

Success in options trading depends on picking the right strike price.

With a cash-secured put, the lower the strike price, the higher the chances the option will expire worthless & unassigned

Barchart makes it easier to decide on the strike by offering visual cues.

First, visit the stock’s profile page and scroll down to the Key Turning Points section on the right side of the screen. Then, click on “See More.”

There, you’ll see support and resistance levels, which can assist in selecting the strike price.

Setting your strike slightly below support levels can be a good way to increase the likelihood of the put expiring worthless.

Selecting a Naked Put Trade

Now, let’s have a look at some potential Naked Put trades. To get there, just click “Naked Put” on the left.

Story ContinuesOnce there, you’ll get a result page with trade recommendations for different strike prices. You can also change the expiration date to whichever you like. Cash-secured puts that expire in 30-45 days are often a good starting point that balances risk and reward. So I’ll change the expiration date to August 15, 34 days away from today

For each trade, the option screener displays only the most important trade information and a handful of option analytics like IV Rank, Delta, and Profit Probability.

For more in-depth metrics, you can click on the Profit/Loss chart button at the top or the icon between the price and expiration dates, and go through the five available tabs:

• P&L Tab: Interactive profit/loss chart with trade breakdown, breakeven, moneyness, and probability of profit.
• Greeks Tab: Displays all key Greeks relevant to the chosen strategy.
• Expected Move Tab: Projects price range using straddles; overlays past price action, earnings, and volatility.
• Volatility Tab: Displays IV, IV Rank, and IV Percentile to evaluate option pricing, along with short-term volatility trends.
• Trends Tab: Uses moving averages, RSI, ATR, and Trend Seeker to gauge momentum; includes visual trend indicators.

Let’s start with the “Expected Move” tab.

As you can see from the chart, on August 15, 2025, MSTR is expected to trade as high as $484.99 and as low as $384.18. The lower number is the most important for a Naked Put trade, so I’ll use that as the lower range as a basis. Since suggested strikes are in increments of 5, we can pick the $385 strike, and for reference, I’ll also show you the $400 and $415 strikes and how the chances of profitability are affected with the higher strikes.

Trade 1: MSTR at $385 Strike Price

According to the screener, you can sell a 385-strike put on MSTR that expires in 34 days and collect $9.00 per share or $900 per contract in premium.

This trade has an 80.52% chance of profitability, which might be ideal for conservative traders who lean more towards income generation and do not want to buy the stock

If MSTR trades above $385 by August 15, the option will expire worthless. If it trades below $385 you’ll be assigned: You’ll buy 100 shares of MSTR at $385, for a gross cost of $38,500. But since you got $900 at the start of the trade, your net cost is lowered to $37,600, excluding trading fees.

Trade 2: MSTR at $400 Strike Price

For the 400-strike put, you’ll collect $12.85 per share or $1,285 total, and the trade has a 75.87% chance of ending with a profit. Should MSTR trade at or below $400, you will be assigned, and your net cost basis will be $38,715 for 100 shares ($40,000 - $1,285).

Trade 3: $415 Strike Price

On the other hand, if you sell a 415-strike put, you’ll receive $17.85 per share in premium, or $1,785 total. The trade has a 71.10% chance of profitability. If you get assigned at expiration, your cost basis will be $39,715 ($41,500 - $1,785) for 100 shares of MSTR. If MSTR trades above $415, you keep the entire premium less trading fees.

Final Thoughts

Cash-secured puts can be an excellent way to earn income and potentially buy stocks at a discount. However, you need to keep in mind that excessive downside movement can lead to immediate paper losses on your stock position. For that reason, it’s best to sell puts on underlying securities you’d actually like to own.

On the date of publication, Rick Orford did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com

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