[GUEST ACCESS MODE: Data is scrambled or limited to provide examples. Make requests using your API key to unlock full data. Check https://lunarcrush.ai/auth for authentication information.]  Hermes Lux [@HermesLux](/creator/twitter/HermesLux) on x 11.3K followers Created: 2025-07-23 18:03:34 UTC The 10-Delta (10Δ) Strategy “Owning MSTR is the equivalent of having a job and selling covered calls is your paycheck. You don't need to worry about the price of the stock because as long as you own the shares you have your job and as long as you keep selling covered calls you will keep receiving a paycheck. If you ever want a pay raise then just buy another XXX shares, or a multiple of XXX shares, to sell more covered calls. Sell the 30-40 DTE 10Δs to keep your job.” Background: This options trading strategy was developed by me specifically for $MSTR. I chose MSTR for multiple reasons: ➡️I believe @saylor is the world leader for Bitcoin (BTC) Treasury Companies (BTCTCs). Many other CEOs are following his lead and benefiting their own companies. Saylor is authentic in his belief that Bitcoin will positively change the world with a full-tilt conviction. ➡️@Strategy’s ticker, MSTR, maintains a consistently high Implied Volatility (IV), which is key to making this strategy last. Without a high-IV, selling 10Δs are typically not worth the effort and risk of losing shares. ➡️MSTR issues its own Class A Common shares to purchase additional BTC. Because their Class A shares trade at a premium to BTC – MSTR shares trade at ~1.9x the price of their BTC holdings – they can effectively purchase BTC at almost XX% off. Additionally, the company uses an innovative BTC acquisition financial engineering process via its at-the-market (ATM) issuances of MSTR’s preferred shares (STRK/F/D/C, etc), creating flywheels on top of the MSTR flywheel, i.e. “torque”, which generates further income for the company to use to buy more BTC. Core tenants of the 10Δ options training strategy: ➡️What is “Delta”? The delta of an option contract represents the per share price change of the option for every $X change in the underlying stock. The delta DOES NOT mean a percentage chance a strike has of expiring in-the-money (ITM). That is an oversimplified and incorrect explanation; it also does not match the intent because Delta does not measure chances of an option expiring ITM. “Probability ITM” is its own option metric. ➡️At open, selling 10Δ options, as prescribed here, has a 94-97% success rate if held to expiration. If managed properly, you can remove nearly XXXXX% chance of ever being assigned and losing your shares/long position. Caveat: There is always a chance of assignment that you should be aware of, meaning it’s always possible you could lose your shares. For more details on option Greeks, using MSTR as an example, you can read here: ➡️This strategy can be executed by selling short calls on shares (Covered Calls), or by selling short calls on deep ITM long calls > XXX days-to-expiration (DTE) at open, also known as “Long-term Equity Anticipation Securities” (LEAPS). The latter trade, a variant of the Diagonal Bull Call Spread, is better known as a “Poor Man’s Covered Call (PMCC). PMCCs come with increased risk and are not recommended for new options traders or those who are sensitive to risk. If 80%+ drawdowns keep you up at night, then do not trade option spreads. I won’t be getting into the mechanics of this here, but if you want to learn more about this, you can go here: ➡️Strike prices for 10Δs vary based on several factors, but primarily due to IV and share price, which are constantly changing during market hours (options prices do not change/update outside primary market trading hours). 10Δs are not a fixed percentage, or a fixed dollar amount Out-of-the-Money (OTM). DO NOT focus on fixed OTM dollars or percentages or you will get burned sooner, rather than later. Opening the trade ➡️10Δs using shares: 🟢Buy XXX shares 🔴Sell-to-Open (STO) -X Covered Call (CC) contract, 30-40 DTE, at the 10Δ ➡️10Δs using LEAPS: 🟢Buy-to-Open (BTO) X LEAPS Contract > XXX DTE at the ≥ 80Δ 🔴Sell-to-Open (STO) -X CC contract, 30-40 DTE, at the 10Δ (same as with shares) Closing the trade You can close the trade early multiple ways: Example A (hold to expiration): ➡️If the option contracts expire OTM, then you keep your shares and get to start again the following week, hopefully with a new 10Δ at a higher strike. ➡️If the option contracts expire ITM, you will be assigned and you will lose your shares. Assignments happen after market hours, and you will likely be notified the day after expiration if assigned. Assignments do not happen in the middle of a trading day. ➡️You do not have to wait until expiration to close the trade. Example B (close early, keep shares): ➡️Keep the shares ➡️Buy-to-Close (BTC) the CC that you sold to open. If the contract has appreciated in value, you will pay more to close the position than you received by opening it, resulting in a loss. If the contract has depreciated in value, then you will pay less to “buy-to-close” than you received when you opened it, resulting in a net profit. ➡️You will still own your XXX shares. Example C (sell shares): ➡️Sell the shares ➡️BTC the CC that you sold to open. If the contract has appreciated in value, you will pay more to close the position than you received by opening resulting in a loss. If the contract has depreciated in value, then you will pay less to “buy-to-close” than you received when you opened it, resulting in a net profit. ➡️Your shares will be gone, and your covered call will be zeroed out. You will receive the cash difference between selling shares and buying to close the short calls. ➡️You can do both (sell shares/BTC) as a single transaction. Example D (keep shares, roll short call): ➡️Keep the shares ➡️In a single transaction: ➡️BTC the CC that you STO; and, ➡️STO -X CC contract, 30-40 DTE, at the 10Δ(if possible) ➡️You will still own your XXX shares; you replaced one covered call with a new one, ideally for a credit (extra cash). There are countless variations of executing this strategy so find whatever way works best for you and your risk tolerance. As a guide for opening a new position, the North Star is always the 30-40 DTE 10Δs. I do not sell weeklies due to what I refer to as "gamma-fication". You will receive the most premium on a per-week basis with weeklies, but adjusting becomes exponentially more difficult when the stock runs up quickly and out of nowhere. Do yourself a favor by staying away from weeklies unless you are ok with selling your shares right away. What If…? …the stocks runs? ➡️Then you probably won’t be able to roll up and out to the new 10Δ. If this happens, then you roll up and out to the highest strike you can for a credit or even. You will always be able to receive a credit if you match deltas and roll out. ➡️For example, if you start with a 10Δ, and the stock runs, and now it turns into the 20Δ, then you roll out to the new 20Δ which is at a higher strike. You might have to roll again the following week to the 30Δ but every time you roll out, even if only $5/share difference, you are extending the goal post out further by making the strike further out of reach, statistically increasing your chances of future success as the stock comes back down or levels off. If you roll weekly, you should almost always be able to roll up to a higher strike. Once the stock levels off or begins to decline, you can continue to roll back down each week from the 30Δ to the 20Δ and eventually back down to the 10Δ. ➡️For more details on rolling monthlies weekly, you can read here: ..the stocks falls? ➡️Then you can either close out the short calls early for a profit or you can roll out to the new 10Δ. There is not an objectively “best” way to manage this. The best way is the way that works best for you individually. You can choose to take a profit at 50/60/70/80%, or roll it, or let it ride to expiration. I tend to roll every week on average to maintain the 30-40 DTE (see “rolling monthlies weekly” link above). ➡️If the stock falls far enough, your 10Δs may now be the 7Δs or even the 5Δs; if this happens you can also choose to roll out and down to the new 10Δ, which would be at a lower strike, for an additional credit. ...I get assigned? ➡️As long as you started by selling 30-40 DTE 10Δs, then you will make a lot of money in a very short time. ➡️The stock might run hard for a month or two, but it will not last. If assigned, you can buy back your shares at market price, even if higher, and start again. ➡️TIP: If assigned, you can execute a buy-write trade, as a single transaction, where you buy back your shares 1-for-1, and then sell the 30-40 DTE at a slightly higher strike, so that you are able to purchase your shares at the same or lower price than you were assigned the previous week. Subtract the premium you received for selling the short calls from the cost of repurchasing the shares to get your new break-even price. Furthermore, the fast run-up in the share price forcing your assignment would mean that IV is spiking, making selling any new calls more profitable and theoretically would increase your chances of successfully selling any new CCs OTM since parabolic moves never last. Further Education ➡️Paper Trading. Some brokerages offer paper trading accounts. Anyone starting off should use paper trading accounts to try out new strategies until they are comfortable trading. This is a great tool; I highly recommend it. ➡️Don’t ever pay for general options education. There is too much great free material online. I always recommend OptionAlpha to everyone. They have a lot of great podcasts and videos to learn for free. TastyTrade is another great resource as well. --- If you sell MSTR covered calls correctly, you can do it forever and generate consistent weekly or monthly income as you sell time (theta decay). And if you really want to turbo charge your yield, then learn to sell PMCCs, but start slow. For additional help, I provide personalized assistance for my subscribers on X, and I may be available for one-on-one video calls, but I am protective of my free time, which is already very limited. --- At the time of this write up, MSTR owned XXXXXXX BTC; BTC was trading between $117,000-$119,000; and MSTR was trading between $410-$25. XXXXXX engagements  **Related Topics** [mstr](/topic/mstr) [stocks](/topic/stocks) [if you](/topic/if-you) [lux](/topic/lux) [hermes](/topic/hermes) [strategy](/topic/strategy) [stocks financial services](/topic/stocks-financial-services) [stocks technology](/topic/stocks-technology) [Post Link](https://x.com/HermesLux/status/1948081568653681022)
[GUEST ACCESS MODE: Data is scrambled or limited to provide examples. Make requests using your API key to unlock full data. Check https://lunarcrush.ai/auth for authentication information.]
Hermes Lux @HermesLux on x 11.3K followers
Created: 2025-07-23 18:03:34 UTC
The 10-Delta (10Δ) Strategy
“Owning MSTR is the equivalent of having a job and selling covered calls is your paycheck. You don't need to worry about the price of the stock because as long as you own the shares you have your job and as long as you keep selling covered calls you will keep receiving a paycheck. If you ever want a pay raise then just buy another XXX shares, or a multiple of XXX shares, to sell more covered calls. Sell the 30-40 DTE 10Δs to keep your job.”
Background: This options trading strategy was developed by me specifically for $MSTR. I chose MSTR for multiple reasons:
➡️I believe @saylor is the world leader for Bitcoin (BTC) Treasury Companies (BTCTCs). Many other CEOs are following his lead and benefiting their own companies. Saylor is authentic in his belief that Bitcoin will positively change the world with a full-tilt conviction.
➡️@Strategy’s ticker, MSTR, maintains a consistently high Implied Volatility (IV), which is key to making this strategy last. Without a high-IV, selling 10Δs are typically not worth the effort and risk of losing shares.
➡️MSTR issues its own Class A Common shares to purchase additional BTC. Because their Class A shares trade at a premium to BTC – MSTR shares trade at ~1.9x the price of their BTC holdings – they can effectively purchase BTC at almost XX% off. Additionally, the company uses an innovative BTC acquisition financial engineering process via its at-the-market (ATM) issuances of MSTR’s preferred shares (STRK/F/D/C, etc), creating flywheels on top of the MSTR flywheel, i.e. “torque”, which generates further income for the company to use to buy more BTC.
Core tenants of the 10Δ options training strategy:
➡️What is “Delta”? The delta of an option contract represents the per share price change of the option for every $X change in the underlying stock. The delta DOES NOT mean a percentage chance a strike has of expiring in-the-money (ITM). That is an oversimplified and incorrect explanation; it also does not match the intent because Delta does not measure chances of an option expiring ITM. “Probability ITM” is its own option metric.
➡️At open, selling 10Δ options, as prescribed here, has a 94-97% success rate if held to expiration. If managed properly, you can remove nearly XXXXX% chance of ever being assigned and losing your shares/long position. Caveat: There is always a chance of assignment that you should be aware of, meaning it’s always possible you could lose your shares. For more details on option Greeks, using MSTR as an example, you can read here:
➡️This strategy can be executed by selling short calls on shares (Covered Calls), or by selling short calls on deep ITM long calls > XXX days-to-expiration (DTE) at open, also known as “Long-term Equity Anticipation Securities” (LEAPS). The latter trade, a variant of the Diagonal Bull Call Spread, is better known as a “Poor Man’s Covered Call (PMCC). PMCCs come with increased risk and are not recommended for new options traders or those who are sensitive to risk. If 80%+ drawdowns keep you up at night, then do not trade option spreads. I won’t be getting into the mechanics of this here, but if you want to learn more about this, you can go here:
➡️Strike prices for 10Δs vary based on several factors, but primarily due to IV and share price, which are constantly changing during market hours (options prices do not change/update outside primary market trading hours). 10Δs are not a fixed percentage, or a fixed dollar amount Out-of-the-Money (OTM). DO NOT focus on fixed OTM dollars or percentages or you will get burned sooner, rather than later.
Opening the trade
➡️10Δs using shares: 🟢Buy XXX shares 🔴Sell-to-Open (STO) -X Covered Call (CC) contract, 30-40 DTE, at the 10Δ
➡️10Δs using LEAPS: 🟢Buy-to-Open (BTO) X LEAPS Contract > XXX DTE at the ≥ 80Δ 🔴Sell-to-Open (STO) -X CC contract, 30-40 DTE, at the 10Δ (same as with shares)
Closing the trade You can close the trade early multiple ways:
Example A (hold to expiration): ➡️If the option contracts expire OTM, then you keep your shares and get to start again the following week, hopefully with a new 10Δ at a higher strike. ➡️If the option contracts expire ITM, you will be assigned and you will lose your shares. Assignments happen after market hours, and you will likely be notified the day after expiration if assigned. Assignments do not happen in the middle of a trading day. ➡️You do not have to wait until expiration to close the trade.
Example B (close early, keep shares): ➡️Keep the shares ➡️Buy-to-Close (BTC) the CC that you sold to open. If the contract has appreciated in value, you will pay more to close the position than you received by opening it, resulting in a loss. If the contract has depreciated in value, then you will pay less to “buy-to-close” than you received when you opened it, resulting in a net profit. ➡️You will still own your XXX shares.
Example C (sell shares): ➡️Sell the shares ➡️BTC the CC that you sold to open. If the contract has appreciated in value, you will pay more to close the position than you received by opening resulting in a loss. If the contract has depreciated in value, then you will pay less to “buy-to-close” than you received when you opened it, resulting in a net profit. ➡️Your shares will be gone, and your covered call will be zeroed out. You will receive the cash difference between selling shares and buying to close the short calls. ➡️You can do both (sell shares/BTC) as a single transaction.
Example D (keep shares, roll short call): ➡️Keep the shares ➡️In a single transaction: ➡️BTC the CC that you STO; and, ➡️STO -X CC contract, 30-40 DTE, at the 10Δ(if possible) ➡️You will still own your XXX shares; you replaced one covered call with a new one, ideally for a credit (extra cash).
There are countless variations of executing this strategy so find whatever way works best for you and your risk tolerance. As a guide for opening a new position, the North Star is always the 30-40 DTE 10Δs. I do not sell weeklies due to what I refer to as "gamma-fication". You will receive the most premium on a per-week basis with weeklies, but adjusting becomes exponentially more difficult when the stock runs up quickly and out of nowhere. Do yourself a favor by staying away from weeklies unless you are ok with selling your shares right away.
What If…? …the stocks runs? ➡️Then you probably won’t be able to roll up and out to the new 10Δ. If this happens, then you roll up and out to the highest strike you can for a credit or even. You will always be able to receive a credit if you match deltas and roll out. ➡️For example, if you start with a 10Δ, and the stock runs, and now it turns into the 20Δ, then you roll out to the new 20Δ which is at a higher strike. You might have to roll again the following week to the 30Δ but every time you roll out, even if only $5/share difference, you are extending the goal post out further by making the strike further out of reach, statistically increasing your chances of future success as the stock comes back down or levels off. If you roll weekly, you should almost always be able to roll up to a higher strike. Once the stock levels off or begins to decline, you can continue to roll back down each week from the 30Δ to the 20Δ and eventually back down to the 10Δ. ➡️For more details on rolling monthlies weekly, you can read here:
..the stocks falls? ➡️Then you can either close out the short calls early for a profit or you can roll out to the new 10Δ. There is not an objectively “best” way to manage this. The best way is the way that works best for you individually. You can choose to take a profit at 50/60/70/80%, or roll it, or let it ride to expiration. I tend to roll every week on average to maintain the 30-40 DTE (see “rolling monthlies weekly” link above). ➡️If the stock falls far enough, your 10Δs may now be the 7Δs or even the 5Δs; if this happens you can also choose to roll out and down to the new 10Δ, which would be at a lower strike, for an additional credit.
...I get assigned? ➡️As long as you started by selling 30-40 DTE 10Δs, then you will make a lot of money in a very short time. ➡️The stock might run hard for a month or two, but it will not last. If assigned, you can buy back your shares at market price, even if higher, and start again. ➡️TIP: If assigned, you can execute a buy-write trade, as a single transaction, where you buy back your shares 1-for-1, and then sell the 30-40 DTE at a slightly higher strike, so that you are able to purchase your shares at the same or lower price than you were assigned the previous week. Subtract the premium you received for selling the short calls from the cost of repurchasing the shares to get your new break-even price. Furthermore, the fast run-up in the share price forcing your assignment would mean that IV is spiking, making selling any new calls more profitable and theoretically would increase your chances of successfully selling any new CCs OTM since parabolic moves never last.
Further Education ➡️Paper Trading. Some brokerages offer paper trading accounts. Anyone starting off should use paper trading accounts to try out new strategies until they are comfortable trading. This is a great tool; I highly recommend it. ➡️Don’t ever pay for general options education. There is too much great free material online. I always recommend OptionAlpha to everyone. They have a lot of great podcasts and videos to learn for free. TastyTrade is another great resource as well.
If you sell MSTR covered calls correctly, you can do it forever and generate consistent weekly or monthly income as you sell time (theta decay). And if you really want to turbo charge your yield, then learn to sell PMCCs, but start slow.
For additional help, I provide personalized assistance for my subscribers on X, and I may be available for one-on-one video calls, but I am protective of my free time, which is already very limited.
At the time of this write up, MSTR owned XXXXXXX BTC; BTC was trading between $117,000-$119,000; and MSTR was trading between $410-$25.
XXXXXX engagements
Related Topics mstr stocks if you lux hermes strategy stocks financial services stocks technology