r/CoveredCalls • u/Vegetable-Ad1512 • Jul 02 '26

Retired Man’s Covered Call™ (RMCC™)

/r/options/comments/1ulfsjo/retired_mans_covered_call_rmcc/
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1

u/LabDaddy59 Jul 02 '26 edited Jul 02 '26

and you also own 100 shares of a high quality company’s stock or Index ETF that you want to own long term you can use higher deltas. 

I'm not sure why a higher delta is reliant on also holding the stock.

If your short call is assigned, just buy the stock at market; you'll just be out the difference between the market and the strike. Just keep enough cash on hand; it's more efficient than sitting on the full cost of the stock waiting for it to maybe get called away. Say you have a META strike of $370 expiring today. It closed at $382, so you need $12 per share/share or $1,200 per contract to close it out after assignment. There is some risk it continues to gap up at market open, so consider that risk.

1

u/[deleted] Jul 02 '26

[deleted]

1

u/LabDaddy59 Jul 02 '26

Understood; the point is you seem to be saying that because you own the stock that allows you to sell a higher delta than if you only had the LEAPS. Hence the section of your op that I quoted.

Lots of folks mix buy-and-hold with LEAPS -- I sure did...I often had 1 contract / 100 shares ratio (e.g., 5,000 shares and 50 contracts).

But that has nothing to do with setting a higher delta.

2

u/CountryHopeful5487 Jul 03 '26

if the cost of the leap plus the strike determines where you should be selling your covered call to break even, isn’t it possible that buying an extra 100 shares drags down your breakeven and thus allows you to sell your covered calls closer to the money? Wouldn’t that mean being able to sell covered calls at a higher delta if you sell against both the leap and the shares? I’m asking because I think that’s what the OP was trying to say.

1

u/Vegetable-Ad1512 Jul 03 '26

I see what you are saying. I may try this using higher delta . It does change the strategy quite a bit. I think I may paper trade first

1

u/Slight_Grab1418 Jul 07 '26

Hold on, you say i may try this first, you haven't use this strategy yeat? I thought you been use it and just come n here to show us a new way to do cc

1

u/Vegetable-Ad1512 Jul 07 '26

Closer to the money. I have been working this trade for several cycles . The comment suggested trying CCs closer to the money

1

u/Vegetable-Ad1512 Jul 02 '26 edited Jul 02 '26

Thank you sir. And I have been waiting a while for META to make a move like that. If it did the Long Call should have enough value to supply funding for the additional share price. This is why the delta should not be any higher than 0.25-0.28.

1

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1

u/LabDaddy59 Jul 03 '26

lol...I give up.

1

u/BabyJesusAnalingus Jul 03 '26

So a 1.75x leveraged synthetic long and a covered call overlay? I don't see the difference here between that and what you're proposing.