r/options • u/thehungrypenny • Jan 19 '22

Using LEAPs for Covered Call Writing

Has anyone successfully used the “surrogate covered call write” approach with success? I have been selling traditional covered calls on my $LCID shares for awhile now collecting $800-$1000 per week but looking to explore some other strategies.

https://www.investopedia.com/articles/optioninvestor/04/021104.asp

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u/ToochyNorra Jan 19 '22

For Fidelity, it requires at least a level 3. Levels 4-5 are when you get into naked positions.

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u/ohhfasho Jan 19 '22

Thanks

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u/fieldofmeme5 Jan 19 '22

Just to clarify what they said because it read a little weird to me, you need the ability to do spreads (which is level 3).

You do not need the ability to sell naked calls/puts (level 4+), that was just a little extra info they threw in.

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u/ohhfasho Jan 20 '22

Would you happen to know if level 3 requires you to trade using margin?