Trade Checklist: Poor Man's Covered Call | Options Trading Co…

A poor man’s covered call is a defined risk alternative to the covered call. It involves replacing long stock with a long call. This creates a diagonal spread that …

33 thoughts on “Trade Checklist: Poor Man's Covered Call | Options Trading Co…”

  1. Very simple, the design is very human lol

    I aprecheate this class was expertly given even tho I didn't understand it.. maybe should start with something simpler haha

  2. Can you explain what this means? “"Pay no more than 75% the width of the strikes” … In other words, the premium I pay should be less than 75% of the difference between the current stock price and the strike of the option?

  3. I have been closing once the sold option hits 50% profit and selling a new call against the LEAP, is this wrong?

  4. when happens if at expiration your short call breaks the strike? I know you can roll but what happens if you don't roll?

  5. Would it theoretically make more sense to sell more short term calls during the leaps term or less longer term calls

  6. How can I full fill the out of the money sell if I don't have the share since the ITM option is not expired yet?

  7. Good video !!! So, if we keep doing a roll over in the short position eventually we may make the amount of the contract we bought? Or if the delta of the long position goes down we can roll it to secure those gains?

  8. Quick question : What happens when the stock price blasts through the strike. First time this happened to me and I made good money but once it capped out, I lost the potential to make something additional. I didnt know what direction to go in so I rolled it out an additional month at the same strike in hopes it may dip ? But when it does or " IF " it does what is the game plan ? I'm in the for long haul

  9. Hello I have a question please .current Apple price is $129.75 I have 6 calls of appl $140 strike at $10.04 per contract for July 16th expiry now worth $7.28 per contract i'm $1653.25 . if i sell the 6 call option $130 strikes June 18 expiry it says i would receive $6060 . what happen if apple closes at $131 on June 18th and $131 on July 16th ? Thank you in advance

  10. You should mention in your videos about what short strikes have good probability of expiring worthless. I've seen some data that 0.30 Delta strikes are good. In my experience this is a good balance of profit from short vs. expiring ITM and rolling out at some disadvantage. By disadvantage I mean I want weekly income. I'd rather tear down my position if the short is stil exceeded on expiration day, than roll out say two weeks or more to see more profit. That's me personally. I'd like to see how you feel about good Deltas on shorts. Maybe I'll learn something new.

  11. Is it safe doing the wheel during election times where things can get out of hand real fast ???
    I’ve been doing it on AAPL but now I feel like getting rid of shares and coming back after elections are done.
    Thank you!!!

  12. What should be ideal IV level & Positional Greeks while entering PMCC of ( 1.ITM call option in a longer-term expiration cycle 2. OTM call option in a near-term expiration cycle)

  13. Let's say Stock keep going down month after month and your DTE for Long option is 340 days, so you have plenty of time to keep collecting premiums from short option, which is good. But suddenly stock makes a positive move and hits your short strike, you are assigned but you have not made a breakeven yet, so it could be loss? What do you think, strategy should be? Thank you in advance.

  14. how do you feel about selling the short strike either ATM or shallow ITM? this is what i've been doing and it seems to work really well in my limited experience, and it turns this strategy from bullish to neutral-to-bullish…e.g., a week ago i bought a sept 11 pepsi call at 130, sold the august 28 call at 136…it cost me 490, i get 600 when it exercises, and (at the time i placed the trade) pepsi was trading above 137…20-25% ROC per month is the average i've seen so far…

  15. What’s the best separation between exp dates? Cause if you continuously sell short term calls you can make more than what the long call is worth.

  16. Why wouldn't we set the written call at an ITM strike, close to our long contract, such that we could potentially collect a lot of premium if we are wrong on the long position, while making a tiny profit if we are are right with the long position? In other words what is wrong with writing ITM contracts? I am pretty new to traditional options trading. Thank you in advance

  17. Another advantage to this is that if an ITM option remains ITM by expiration, this will not expire worthless, and can be sold for less than a total loss, or in the best case scenario a profit, is that correct?

  18. If your short strike is ITM at expiration you will need to have the stock to be assigned but if your long us not yet at BE how would you exercise your long call. The only way around that i see is if your short strike is past the total of your long strike plus the premium you paid to purchase it.

  19. If the premium from all of the short options covers the cost of the long option, does it even matter if it expires worthless?

  20. How would this make any money? Pardon my ignorance its just that looking at paying the premium to buy a call… but then going by the premium Id be getting for selling calls. I’d break even… where’s the money in that? I know I’m doing something wrong but could someone provide any example or experience

  21. Great video, thank you! So basically, if you're bullish but IV is low, you would use PMCC, but if IV is high, you would sell a naked put?

  22. With the introduction of weekly options now, this can be applied more often. I've got good success with this trading the SPY by longing the 4 weeks and shorting the 1 week.

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