I use spreads all the time, prolly have 2-3 going each month. The profit is lower as youve noticed for a reduced max loss. the gains tend to be 10-30% max unless you find a gem. Short Version is that because you have reduce profit you need to have a higher win rate to break even. There is also a super wide spread on those so filling in the mid will be tough.
I play them a few ways.
1.) I’ll basically set an exit the moment I sell it for roughly have the max gain. Sometimes you can fill that quickly which can make it a pretty solid win for short period.
2.) I rarely hold until expiration in an attempt to make max profit. I’ve done it a few time but got burn a few as well. I was able to roll them Out to eventually turn the profit but could only do that because I had excess capital
3.) lastly I use spreads(betting stock won’t go over a certain amount, what you did) as passive income. the way I do is make a position that might net me 20/30k for the month at max profit. Then I set a conditional trigger to BUY actual shares if it hits my sold call price and sell the bought call at market or trailing stop. What this means is that, in your case, if the price of MSTR hits 299.99, I would buy the 1000 shares, and let myself get executed. But because I sold for whatever I make that small profit and the profit from whatever the bought one went for. So my profit potential went down, but I’m not out money
the last one only works again if you have backup funds to do that. The advantage is that I only “risk” something like 25k on the trade and I choose to bail on #3 I’m out 25k or some portion of it, the other 400k I had sitting on the sidelines can be used to prevent any loss at all need be. Like anything there are catches, pick moderately good stocks because if my trigger goes off AND the upside swing was temporary, I could be bag holding 1000 shares of something.
in general I find it as a safe(ish) way to make a base amount each month to supply my other trades and grow my account. Can do the same thing on the put side. Let yourself take the shares and Deal with it later.
my most recent failure Example was Uber. Did what you did a month or two ago. It went up to 75ish, past my call and my trigger went off. I bought the uber shares but they dropped and my Sold call expired worthless(so I did make that money) but now I owned 6000 shares of uber. I only recently was able to sell them with the recent increase. During That two months I held I was able to sell CC but it wasn’t making me much.
EDIT:
Thought I'd add an example of a more common spread I would take. It also seems like the boat you would be unless you magically hit the mid of the spread on those two options
My max loss would be the 5$ difference between the two minus the(let's say I take bid) 1.61.
Max profit: 161$ per option
Max Loss: 339$
This is why it's not a common play. I'd have to win 3 out of every 4 spreads I play to break even. That's a tough ratio for anyone. This is why I backup with the potential to execute numbers 2/3 above(roll or own) and on a stock like AMZN, I would. So let's say I buy 25 of these. I'm risking 8k to make 4k. If it looks to keep climbing past 235$ by my expiry I have to roll or buy 2500 shares of amazon at close to 600k. Not ideal but owning AMZN isn't the end of the world either....or of course take the 8k loss.
The other option is to set it to auto-close when you've made half of the potential max profit. Which can happen super easily with theta decay or one "bad" move day dropping the stock. Time works FOR you(in most cases) in a spread unlike other option plays. With the close early approach is does increase my win rate by a significant % but of course risking 8k to make 2k isn't glorious, but as I mentioned it helps fill in the bottom holes of my account each month to support steady growth or give me play money for more risky plays I like to make.
