---
name: skill-poor-mans-covered-call
description: Deep in-the-money longer-dated call plus nearer out-of-the-money short calls. Use instead of a share covered call when the long leg stands in for the stock.
skill_family: options-strategy
last_updated: 2026-09-30
---

# Poor man's covered call

## When to use

- The holder wants covered-call mechanics without buying 100 shares.
- The long call is deep in the money and much farther dated than the short call, often a LEAP.

## Setup

- Long leg: deep in-the-money call, high delta, longer expiry.
- Short leg: nearer-term out-of-the-money call, sold against that long call.
- Capital at risk is the net debit, not the share price times 100.

## Rules of thumb

- Track the long-leg delta. If it is no longer a stock substitute, say so.
- Max loss in the illustration is the net debit.
- Early assignment on the short call needs a response: exercise or close the long call, or buy shares. Name one.
- The short strike stays above the long strike.

## Pitfalls

- A long call that is not deep enough, so the position is a long call plus a short call, not a stock substitute.
- Short premium smaller than the long-leg bid-ask and decay.
- Repeating the short call after the long delta has fallen.

## Disclaimer

Options involve risks and are not suitable for everyone. Read *Characteristics and Risks of Standardized Options* at OptionsEducation.org, or from your broker or the Options Clearing Corporation, before using this structure. Examples omit commissions, fees, margin, interest, and taxes. This is a structured playbook for education. It is not a signal, a recommendation, a solicitation, or a broker order.