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The Poor Man’s Covered Call (PMCC) is one of the most capital-efficient options strategies available, and it’s a great strategy for traders who want covered call income without buying 100 shares, or have smaller accounts.
Instead of spending $15,000+ to own 100 shares and sell calls against them, a PMCC uses a deep in-the-money LEAPS call as a stock replacement, cutting your capital requirement by 50%+. You still collect premium by selling short-term calls against your LEAP, generating income the same way a traditional covered call does — just with far less money tied up.
The tradeoff is you don’t own the shares outright, so you’re working with an option that has its own expiration and time decay to manage. In this video, you’ll learn exactly how to set up a Poor Man’s Covered Call step-by-step, how to choose your LEAPS strike and expiration, and how to select and manage your short calls over time. We’ll walk through real trade examples on Robinhood (HOOD), visualize the P/L at different price levels, and cover how to handle adjustments when trades move against you.
==== Video Chapters ====
00:00 What is a Poor Man’s Covered Call? (PMCC)
01:14 How to Set Up a PMCC
03:43 Traditional Covered Call vs. PMCC
07:25 PMCC Setup Guidelines
10:30 How to Manage a Poor Man’s Covered Call
14:32 Dealing With Short Call Assignment
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