PMCC: the poor man's covered call, explained without the swagger

The poor man's covered call gets oversold by retail content because the headline math looks free. Capture covered call income for a quarter of the cost. What the headlines leave out: the long LEAPS still loses value over time, and if you sized it wrong, the income you collect each cycle does not cover that decay.

The structure

• Buy a LEAPS call with at least 12 months to expiration and delta of at least 0.80. Treat this as your stock substitute.
• Sell a 30 to 45 DTE call at delta 0.20 to 0.30 for income.
• Repeat the short call cycle each month or expiration window.

Why delta 0.80 matters

A 0.80 delta long call moves like 80% of the stock. It also has relatively little extrinsic value, which means the daily decay you pay is small. A 0.50 delta long call has tons of extrinsic value and bleeds far more each day. The PMCC math falls apart if your long leg is not deep enough.

How I pick the short call

I sell the short call at 0.20 to 0.30 delta. Far enough out to give the position room to breathe. Close enough to collect meaningful premium. If the stock rallies into the short strike, I either close the short for a partial loss and re-sell further out, or roll the short up and out for a small credit.

Never sell the short call at a strike below your LEAPS strike. If the stock rallies past it and you get assigned, you have to deliver shares you do not own. The fix is messy and expensive.

When to use it

• On names with IV Rank below 30, where outright covered calls do not pay enough premium to be worth the capital.
• On names you genuinely want to own for a year or longer.
• When you have less than 100 shares of the underlying.

What to do next

Open the scanner and filter to PMCCs. The scanner only surfaces PMCCs where the long LEAPS delta is above 0.80, so you can trust the structure. Read the legs and confirm.