Most investors hold onto a losing position, collecting small dividends while waiting years for the price to climb back to their cost basis. But active investors can make their capital work harder. For example, on a 2,200-share position purchased at $30.45 per share, the total investment is about $67,000. By writing a deep in-the-money call at a $13 strike and collecting $11.40 per share in premium, the position releases roughly $25,000 in cash immediately while accepting an effective sale value of $24.40 per share. The realized paper loss of $13,310 is more than offset by what the freed capital can earn — compounded monthly at just 2%, that $25K grows to $42,700 by early 2028, while margin interest savings add another $4,500, and dividends collected along the way total nearly $8,700.

Altogether, the recovered and reinvested cash produces over $55,700 in future value versus a static loss of $13K — a net gain of roughly $17K compared with simply holding and waiting 3–5 years for the stock to rebound.

By extracting and reinvesting, the investor turns dormant capital into an active income engine — improving yield, accelerating compounding, and dramatically shortening the recovery cycle. In short, the Capital Extraction Method transforms time spent waiting into time earning.