Strategy Overview
Medium RiskExpertBullish
The PMCC uses a deep ITM LEAPS call as a stock substitute, then sells OTM calls against it. It simulates a covered call with far less capital required.
Max Profit
Short strike - LEAPS strike - net debit + credits collected
Max Loss
Net debit paid for LEAPS minus credits collected
Breakeven
LEAPS strike + net debit
Probability
~55% win rate
hist. est.
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Example Setup Calculator
$
Debit Paid
$400
Max Profit
$500
Max Loss
$400
Breakeven
$104.00
Strategy Components
BUY ITM CALL
Buy deep ITM LEAPS call (70+ delta)
SELL OTM CALL
Sell near-term OTM call
When to Use
- You are long-term bullish but want income
- You want covered call exposure with less capital
- You want to sell calls repeatedly against LEAPS
- You understand diagonal spread mechanics
Best Market Conditions
- Long-term bullish trend
- Want income with reduced capital
- Stable or rising market
Best Practices
- Buy LEAPS with 70+ delta (deep ITM) and 6+ months
- Sell calls with 30 delta, 30-45 DTE
- Roll short calls monthly for ongoing income
- Never let short call go deeper ITM than LEAPS strike
Ready to Trade?
Review Poor Man's Covered Call and practice it in paper trading with the school workflow.
Paper Trading