Learn / Strategies
Poor man's covered call (diagonal)
BTO (buy to open) a longer-dated call instead of 100 shares, then STO (sell to open) a nearer call against it. Close with STC (sell to close) and BTC (buy to close).
A PMCC (poor man's covered call) replaces 100 shares with a deep ITM (in the money) longer-dated call — often a LEAP (long-term equity anticipation security) — then STO (sell to open) a nearer call against it. Two calls, two clocks. Capital is smaller. The long can still go to zero.
AAPL $190. BTO (buy to open) a 365-DTE (days to expiration) $160 call at $42 ($4,200). STO (sell to open) a 30-DTE (days to expiration) $200 call at $3 ($300). Shares would have been $19,000. Write both expirations on the journal.
The slider is the short clock. The long call is days + 335. Delta is high, not 1.00 — that is why it is not a covered call.
Teaching lab
Long LEAP plus a short near call
AAPL $190. BTO 365-DTE $160 call at $42. STO 30-DTE $200 call at $3. Slider is the short clock.
- P/L / share
- +0.45
- ×100
- +45
- Delta
- +0.574
- Gamma
- -0.0189
- Theta / day
- +0.0499
- Vega / vol pt
- +0.2848
P/L / share
vs the lesson entry
Delta
share-equivalent
Gamma
peaks near the strikes
Theta / day
clock
Vega / vol pt
fear priced in
Rho / rate pt
small at 30 days
Back month = days + 335. Two clocks, no shares. Long can still go to zero.
Compare: covered call (this is the version without shares)
Tickets for this structure
BTO (buy to open) · STO (sell to open) · BTC (buy to close) · STC (sell to close). Illustrative fills only. We never send these orders.
BTO (buy to open)
Open a long
Buy to open (the long-dated call)
AAPL $190. BTO (buy to open) 1× 365-DTE (days to expiration) $160 call at $42.00 ($4,200). Fake stock. Delta is high, not 1.00.
STO (sell to open)
Open a short
Sell to open (the short-dated call)
STO (sell to open) 1× 30-DTE (days to expiration) $200 call at $3.00 ($300). That is the income lap. Two expirations now.
BTC (buy to close)
Close a short
Buy to close (the short call)
Short marks $0.40. BTC (buy to close) at $0.40. Lap ≈ +$260. The 365-day call stays. Flatten the short or risk assignment.
STC (sell to close)
Close a long
Sell to close (the long call)
Exit: STC (sell to close) the $160 and BTC (buy to close) any short. Leave the short and you are naked. Long can die: −$4,200.
Not a covered call
A covered call needs 100 shares. A PMCC (poor man's covered call) needs a long call that still has time. Early assignment on the short can leave you short stock plus a long call. Write both expirations on the journal. Earnings inside the short DTE (days to expiration) is a common stand-aside.
How the Greeks move
Deep long call: high delta, you pay some theta, large vega. Short near call: cuts delta and collects theta. Slide days down on the short: its gamma jumps. The long can still go to zero.
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Teaching numbers only — not a live quote, not a fill, not financial advice. All lessons · Back to Practice · Replay · Journal.