Transcription
When you buy a LEAPS option, you can use this to make weekly income using the poor man's covered call. The way this strategy works is we're going to start out by buying a LEAPS option. If you already own stock, you can skip this step, but you're going to buy a LEAPS option with around an 80 delta. So, we're going to buy this 65 call, and then after we buy that, we can sell call options against it.
Whenever you sell call options, you want to keep the expiration date relatively short, and you want the delta value to be relatively low, between 20 and 30. So, we're going to sell this 96 call for 98, but we want to make sure that the total cost between these two options is less than the difference between our strike prices. That way, if we do get assigned on our 96-dollar call to sell our 100 shares, we can exercise a 65 call to buy at 65, settling at 96. If the total cost between these options is less than the difference between our strike prices, then we can still make a profit even if we get assigned.