The poor man's covered call explained
Asked 5 years ago
I'm a new investor with a relatively limited budget, so I'm researching ways to build up some income with minimal risk. After some research, I've learned about this long call spread called the "poor man's covered call". Could someone explain it in more details, and is it risky?
Andia Rispah Igobwa
Monday, June 21, 2021
If you're poor or would rather commit a small amount of capital, this is an excellent strategy.
Its name is due to its lower risk and smaller capital requirement.
Usually, you have to buy 100 shares or more of stock to use a covered call strategy. But with the poor man's covered call, you can buy fewer shares.
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