Poor Man's Covered Call (PMCC): Capital-Efficient Income Strategy

Setup: buy a 0.80–0.85 delta call at 6–12 months out (LEAPS); sell a 30–45 DTE call at 0.20–0.30 delta (the short leg). Collect short-call premium monthly. The long LEAPS provides synthetic stock exposure with capped downside (max loss = LEAPS premium); the short call generates income against it. Roll the short call monthly; manage the LEAPS as a long-term directional position.

Failure modes: short call gets blown through during a sharp rally, forcing a roll for debit or a closeout at a loss. LEAPS decays meaningfully if the stock chops sideways — the long leg's theta is small but real, and a year of choppy action with poor short-call income leaves the trader net underwater. The PMCC works best on stocks with mild to moderate uptrend bias — strong rallies hurt the short leg; strong declines hurt the LEAPS.