Technology
MSFT
Microsoft Corporation
How to generate income from Microsoft (MSFT) using covered calls and cash secured puts. Includes premium expectations and wheel strategy examples.
Monthly Premium1.0-1.8%
Annualized Return12-22%
Stock Price$410-440
IV RankModerate (30-45)
Options LiquidityExcellent
Dividend Yield0.72%
Why MSFT for Covered Calls & Cash Secured Puts?
MSFT is a steady performer with strong fundamentals in cloud (Azure), enterprise software, and AI (OpenAI partnership). The stock offers consistent premiums with less volatility than pure growth stocks, making it ideal for conservative income investors.
Example Covered Call Trade
MSFTCovered Call
Strike Price$450 (5% OTM)
Expiration30 days
Premium$5.80 per share
Return If Flat1.4% ($580)
Return If Called6.3% ($2,680)
Keep Probability72% keep shares
Recommended Strategy for MSFT
Ideal for conservative income with monthly calls 4-6% OTM. The dividend plus premium creates a solid income stream. Use CSPs to accumulate shares during market corrections.
Risks to Consider
- Lower volatility means lower premiums
- Expensive to own 100 shares (~$42K)
- Cloud competition from AWS/GCP
- Regulatory scrutiny on AI
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