Read this first. Options are not a safer way to own a stock. A call bought for $2,000 can be worth nothing at expiry if the stock ends below the strike, and the leverage that makes a LEAP cheap works just as hard on the way down. Quotes here are delayed, midpoints between bid and ask; the price you would actually get can be worse. Educational research only, not investment advice.
Tonight’s pairs
A deep in-the-money LEAP (delta 0.80–0.90) stands in for the shares, and a short call 30–45 days out (delta near 0.25) is sold against it, month after month. The premium column is one month’s short call as a share of what the LEAP cost. The strike check matters: if the gap between the two strikes is smaller than the net cost, being called away early locks in a loss.
| Company | Long LEAP | Short call | Net cost | One month’s premium | Strike check | LEAP liquidity |
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What can go wrong
A LEAP has an expiry date: the stock can be right in two years and the call still expire worthless if the move comes too late. A deep in-the-money call does not collect dividends. A Poor Man’s Covered Call caps the upside for each month a call is sold, and can be assigned early. Puts cost money every year in which nothing bad happens. And a company passing every filter here says only that the arithmetic and the option market line up tonight; it is not a forecast and not a recommendation.
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