Test a Poor Man's Covered Call across possible paths

Market outlook Moderately bullish

Long-dated deep ITM call financed by a short-dated OTM call, approximating a covered call with less capital. Use the lab to see how the position responds before committing to a single forecast.

Scenario Lab

See how the position changes

Move the underlying, clock, and implied volatility independently. Values before expiration use a Black–Scholes estimate; expiration values use intrinsic payoff.

Buy call 1Strike Leg DTE Leg IV %Premium

Sell call 2Strike Leg DTE Leg IV %Premium

The catalog’s default strikes and premiums are illustrative. No ticker lookup or market data is used.

Selected scenario—

Estimated P/L before expiration by underlying move and time remaining
Underlying	Today	30 days	14 days	7 days	Expiration
-15% —	—	—	—	—	—
-10% —	—	—	—	—	—
-5% —	—	—	—	—	—
0% —	—	—	—	—	—
+5% —	—	—	—	—	—
+10% —	—	—	—	—	—
+20% —	—	—	—	—	—

IV lens

At expiration

Intrinsic payoff checkpoints

Time value has gone to zero. IV no longer changes the result.

Profit or loss at expiration
Underlying	Move	P/L
—	-15%	—
—	-10%	—
—	-5%	—
—	0%	—
—	+5%	—
—	+10%	—
—	+20%	—

Model boundary: theoretical estimates use dividend-adjusted Black–Scholes for European exercise or a 100-step binomial estimate for American exercise. Fees, spreads, discrete dividend dates, early assignment behavior, and liquidity effects are excluded. Calculation, not advice.

Why this structure behaves this way

Poor Man's Covered Call is shaped by positive delta and long vega exposure

The deep ITM long call carries a high delta, approximating stock ownership, while the short front-month call caps upside and collects theta. Net vega stays long overall because the long-dated leg retains more vega than the short leg gives up.

This page uses the catalog’s illustrative default legs so you can compare direction, time, and volatility effects in one place. Edit the assumptions above to test a different starting point.