Income strategies › Poor man's covered call
Stop 7 of 7 on the CC Line
Poor man's covered call covered calls on a budget
Use a long-dated, deep in-the-money call instead of 100 shares, then sell short-dated calls against it. Risk: Moderate (defined)
How it works
Instead of buying 100 shares, you buy a long-dated deep in-the-money call (often a LEAPS, 6–12+ months) which moves almost like the shares for a fraction of the cost. Then you sell short-dated out-of-the-money calls against it, like a covered call. Technically it's a diagonal call spread.
When it earns
Steady or slowly rising markets, while the short calls keep expiring worthless.
What can go wrong
- You can lose the whole debit paid for the long call if the stock falls a lot (example: up to $1,700 minus premiums collected).
- Short call assignment: if the short call is assigned you must deliver shares. You'd normally exercise or sell the long call, which may lose its remaining time value.
- Time decay and volatility also work against your long call.
- Needs a spread-level options approval at most brokers.
Worked example Hypothetical
Fictional XYZ at $50. Instead of $5,000 of shares, buy a 1-year $35 call for a made-up $17.00 (= $1,700). Sell a 30-day $55 call for $1.00 (= $100). Chart simplification: we assume the long call keeps $2 of time value at the short call's expiry.
| Scenario (hypothetical) | Outcome |
|---|---|
| XYZ ends at $50 | Short call expires: +$100. Long call ≈ $17 (unchanged in this simplification). |
| XYZ ends at $55+ | ≈ +$600 (capped by the short call) |
| XYZ ends at $35 or less | ≈ −$1,400 (long call only worth assumed $2 time value) |
| Capital used | $1,700 vs $5,000 for 100 shares |
How fees eat into the premium
Using each broker's published fees from our own data (verified 2026-10-25): the cost to open this example (1 contract in one order) next to the hypothetical $100 credit, and the same trade if the premium were a tiny $0.10 per share. Holding to expiry avoids a closing order; closing early roughly doubles the fees.
Includes commission, platform fee, per-order minimums, estimated US regulatory fees and 9% GST; excludes FX and exchange fees. "Promo" means open-ended promos available to everyone (no new-customer offers). Try your own numbers in the fee calculator →
Where to find sell-put ideas
We don't publish option prices or trade ideas. Several Singapore brokers have built-in screeners inside their apps that filter options by strike, expiry, premium or probability, using live data you're licensed to see as their customer:
- moomoo SG: Its app has an options screening tool marketed as Easy Sell Put, plus a general options screener and strategy builder. moomoo SG (placeholder referral link) · fees
- Tiger Brokers SG: The Tiger Trade app has an options screener / strategy tools for filtering contracts. Tiger Brokers SG (placeholder referral link) · fees
- Webull SG: Webull's app includes an options screener and a strategy builder. Webull SG (placeholder referral link) · fees
- Interactive Brokers SG: IBKR's platforms include market scanners and options strategy tools (e.g. in TWS). Interactive Brokers SG (placeholder referral link) · fees
Feature names and availability change and may depend on your account's options approval level; check in the app. A screener result is not a recommendation. ⚠ Referral links above are placeholders (not live); if they become affiliate links we may earn a fee at no cost to you (disclosure).
The CC Line
Seven option income strategies, drawn as a train line. Board at CC1: each stop builds on the ones before it. Interchange stops combine earlier ones.