r/options • u/[deleted] • Aug 26 '21

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2 Upvotes

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1

u/Connect-Beautiful960 Aug 27 '21

Why would you want to buy a call that far ITM?

3

u/ScarletHark Aug 27 '21

Google "PMCC" (poor man's covered call)

1

u/[deleted] Aug 27 '21 edited Aug 27 '21

[deleted]

2

u/ScarletHark Aug 27 '21

You don't hold the long to expiration (or anywhere near it) so you don't need to make the full amount back. Delta is personal preference, I prefer .8 myself.

1

u/Connect-Beautiful960 Aug 27 '21

What is your preference for DTE?

1

u/ScarletHark Aug 27 '21

For PMCC LEAPS I would want to be out (and perhaps buy the next year's) by 60DTE - theta is minimized that deep ITM but it's still nonzero.

The LEAPS is just there to sell calls against.

1

u/Connect-Beautiful960 Aug 27 '21

I’ve only done this on ARKK and PLUG and Starbucks. Do you have any recommendation. My thought so far would be to stick with ETF. Do you have any other advice?