Poor Man's Covered Call

A poor man's covered call (PMCC) swaps the 100 shares a traditional covered call requires for a single long-dated, deep in-the-money LEAPS call, then sells short-dated calls against it for income the same way a normal covered call sells against real shares. The appeal is capital efficiency: the long call typically costs a fraction of what 100 shares would, while behaving similarly to the stock. The short call's strike sits above the long call's strike, and the gap between them caps the position's max profit — specifically, that gap minus the net cost paid to open the trade. A PMCC carries risks a traditional covered call doesn't: the long call can lose value and eventually expires, it earns no dividends, and if the short call is assigned early, you have no real shares to deliver and must exercise the long call, giving up whatever time value is left in it.