The Blue Hour – 4

Poor Man’s Covered Call (PMCC)- Course Outline
Hosted by:Dr. Alan Ellman.

Topics discussed
• Strategy overview
• Overview of traditional covered call writing
• The PMCC defined
• Levels of trading approval
• Broker commissions
• Pros and cons of the PMCC
• Best underlying securities
• How to structure a trade
• Strike price selection
• INTC example
• MRK example
• XLK example
• Initial calculations
• Maximum profit and breakeven
• Maximum loss
• Risk-reward profile
• Closing a winning trade
• Greeks perspective
• Earnings reports
• Ex-dividend dates
• Changes in cost basis
• Rolling LEAPS
• Position management/ exit strategies
• Strategy summary
• And So Much More
***Written questions will be answered live during the webinar

The Poor Man’s Covered Call (PMCC)- Overview

The Poor Man’s Covered Call is a non-traditional way of using covered call writing at a reduced capital outlay. Its technical term is a long call diagonal debit spread where long-dated options known as LEAPS are used to replace stocks or ETFs. The cost of buying LEAPS is much less than that of purchasing stocks themselves and so the outlay is much less and potential return on capital can be significantly higher.

Like all strategies, there are pros and cons related to this strategy and specific ways to set up and manage trades. There is no free lunch as some would expect when simply looking at the definition of the strategy.

This presentation will get into the specifics of the strategy and provide information (I believe) found nowhere else.