Investor Education Series: Poor Man’s Covered Call
Some of you might have heard of the term “covered call”, an options strategy that aims to generate a steady stream of income every month. However, do you know of its alternative, the “Poor Man’s Covered Call” strategy which is targeted at investors who “are poor”, or one who does not wish to commit a large amount of capital?
The poor man’s covered call strategy is a relatively “low-risk” option strategy which allows one to enjoy the benefit of leverage while potentially generating a steady stream of “passive income” if done appropriately.
Before I go into the details of what a poor man’s covered call strategy is all about, let me briefly run through the basics of a “covered call” option strategy.
The Covered Call Strategy
The covered call strategy combines the purchase of shares as well as the usage