adiggs
Well-Known Member
Leap Covered Call is, as far as I know, a term we've coined in the Selling TSLA Options thread and is not an industry term. You'll have good success learning more about this by DuckDuckGo'ing for "Poor Man's Covered Call". That's a more typical term and will directly discuss the trade in the context of a covered call. The idea is that the leap you purchase is standing in for the shares you would need to own for a covered call.Can someone point me to or give me an explanation of how a LEAP Covered Call (LCC) works and what the requirements might be for the LEAP itself? i.e., ITM, DITM, doesn't matter?
More technically this is an instance of a diagonal spread. Looking for that might also be helpful - I did my looking under the PMCC heading