tasty BITES

Poor Man's Covered Call

| Jun 7, 2017
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    tasty BITES

    Poor Man's Covered Call

    Jun 7, 2017

    The Covered Call can be hard to trade in a tastybites account because of the buying power reduction. One way to get around the BPR while putting on a similar trade is the Poor Man’s Covered Call.

    The Study

    • 2005-Present, SPY
    • Short 30 delta call 45 DTE, long 70 delta call 105 DTE
    • 30 delta buy-write 45 DTE
    • No early management, no rolling

    Results

    • Covered Call and Poor Man's Covered Call have same win ratio
    • Average profit of Poor Man's Covered Call is only 25% less than Covered Call

    We can see that Poor Man's Covered Call is a great alternative for Covered Call, especially when BPR is the concern.

    This video and its content are provided solely by tastylive, Inc. (“tastylive”) and are for informational and educational purposes only. tastylive was previously known as tastytrade, Inc. (“tastytrade”). This video and its content were created prior to the legal name change of tastylive. As a result, this video may reference tastytrade, its prior legal name.

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