A Capital-Efficient Covered Call Alternative
The Poor Man’s Covered Call combines a deep in-the-money long-term call with a shorter-term call sold against it. It aims to reproduce the income profile of a traditional Covered Call without purchasing 100 shares of stock.
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Build and Analyze the Position
Study market conditions, volatility, time decay and the option Greeks before selecting the underlying, expiration and strike prices.
- Compare PMCC economics with a traditional Covered Call.
- Analyze Delta, Theta and Vega.
- Select LEAPS and short-call strike prices.
- Execute and organize the trade in Thinkorswim.
Manage Risk and Combine Strategies
Learn how the position behaves alongside Protective Puts, Naked Puts, Vertical Spreads, Iron Condors and Straddles, then connect the trade to portfolio sizing and diversification.
- Roll and manage expiring short calls.
- Evaluate combinations with other option structures.
- Control capital reserves and portfolio exposure.
- Prepare for assignment, dividends and extreme events.
