LD Lossdog Research
strategy

Poor Man's Covered Call

2 matching records.

Trade idea

AAPL Poor Man's Covered Call

The speaker suggests using a poor man's covered call strategy for Apple (AAPL) by buying a long-term LEAP at the money and selling a front-month call. This allows for premium collection while holding the stock, with the ability to roll the front-month call monthly. The strategy is designed to be flexible and adaptable to market conditions.

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StrategyPoor Man's Covered Call
Assetstock
Expirationfront-month
Time horizonLong-term, with monthly rolling of the front-month call
Entry / triggerBuy a long-term LEAP at the money and sell a front-month call
Target / exitCollect premium while holding the stock
Invalidation / stopIf the stock moves significantly against the position
SpeakerScott
Structure / legs
  • Buy a long-term LEAP at the money (e.g., 150 strike)
  • Sell a front-month call (e.g., 165 strike)
Risks
  • Market risk if the stock moves against the position
  • Time decay on the short call
longEquitylongPoor Man's Covered CallAAPL
high confidenceVerify in video at 22:12 ↗
Trade idea

null Poor Man's Covered Call

The 'poor man's covered call' strategy is a viable method to reduce the cost of LEAPS by combining a long-term LEAP with a near-term out-of-the-money call. This approach leverages the lower cost of the near-term option to improve the basis of the long-term position, allowing traders to participate in long-term equity growth while managing risk and cost. The strategy is particularly useful for high-quality stocks where the upside potential is significant, and the cost of the LEAP is a concern.

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StrategyPoor Man's Covered Call
Assetnull
Expirationnull
Time horizonLong-term (150-300 days for LEAPs)
Entry / triggerBuy a long-term LEAP and sell a near-term out-of-the-money call against it
Target / exitReduce the cost of the LEAP while maintaining upside potential
Invalidation / stopIf the underlying stock significantly underperforms, the strategy may fail to capture upside
SpeakerSpeaker
Structure / legs
  • Long-term LEAP
  • Near-term out-of-the-money call
Risks
  • Volatility risk
  • Time decay on the LEAP
  • Limited upside due to the short-term option sold
nullPoor Man's Covered Call
high confidenceVerify in video at 12:08 ↗