💰 Options Screener
Optimise your Buy&Hold strategy with Cash-Secured Puts & Covered Calls with ≥2% Premium🔧 PMCC Screener
Poor Man's Covered Call — replace 100 shares with a deep in-the-money LEAPS call🔧 How the PMCC screener works The numbers on each card, the filters a combination has to pass, and the formulas behind them.
They can lose their entire value in a short time, and a position can behave very differently from the underlying stock. Only use these strategies if you understand how options are priced and what happens at expiry. This screener is informational and is not investment advice.
What is a Poor Man's Covered Call?
A regular covered call means owning 100 shares and selling a call against them. A Poor Man's Covered Call (PMCC) replaces those shares with a single deep in-the-money call with a long time to expiry. You then sell short-dated calls against that position, the same way you would against shares.
The appeal is capital. Where 100 shares of a $225 stock cost $22,500, the long call in our example costs $6,930 — under a third. The trade-off is that the long call expires and shares do not, so time works against you in a way it does not with stock.
Why it can work
A deep in-the-money call is priced almost entirely from intrinsic value — the amount by which the stock exceeds the strike. What you pay on top of that is extrinsic value, and that is the part that decays away.
Intrinsic 225.40 − 160.00 = $65.40
Price $72.50
Extrinsic 72.50 − 65.40 = $7.10
That $7.10 is the time cost of the entire 471-day position, paid once. Against it you can sell a new short-dated call roughly every 35 days. The structure sells time value repeatedly against a cost you pay a single time. That is the whole idea — and the reason a PMCC held for one cycle is a mediocre trade while one held for ten or twelve can be a good one.
Will every cycle pay the same premium?
No, and you should not plan on it. What a short call is worth depends on implied volatility at the time, where the stock is trading, and which strike you choose. If volatility falls sharply, the same strike may pay a third less. If the stock rises, you can usually write a higher strike for a comparable premium, which works in your favour. The figures on each card describe one cycle at current prices — they are not a forecast of what the position will earn over its life.
The numbers on each card
What the position costs to open: the long call's ask minus the short call's bid. It is also your maximum loss — if the stock falls below the long strike and the call expires worthless, nothing remains. Unlike a covered call, there are no shares left over.
72.50 − 3.20 = $69.30 per share, or $6,930 per contract
The premium collected, measured against the net debit. This is the PMCC equivalent of the premium percentage shown on our covered call cards, but measured against a much smaller capital base — which is exactly why it looks larger.
3.20 / 69.30 = 4.62%
The same call written against 100 shares would return 1.4%. The difference comes from leverage, not from a better option.
The ceiling on the whole trade, reached when the stock closes above the short strike and you are assigned. Because you hold no shares, assignment forces you to close the long call to deliver — so the premium you collected is already inside this number rather than added on top of it.
(245 − 160) − 69.30 = $15.70, or 22.7% of the debit
This is the key difference from a covered call, where assignment leaves you with the sale proceeds plus the premium.
Delta is how much an option moves per dollar of movement in the stock. A delta of 0.93 behaves roughly like 93 shares. Net delta is the long leg's delta minus the short leg's — the share-equivalent exposure you are left holding after selling part of it back.
0.931 − 0.218 = 0.713
Delta is not supplied by our data provider. We calculate it with the Black-Scholes-Merton model, which includes the dividend yield. For the long leg the volatility is taken from the out-of-the-money put at the same strike (put-call parity), cross-checked against the neighbouring strikes and the at-the-money level, because the quoted volatility on deep in-the-money calls is unreliable. For the short leg it comes from the call's own mid price.
Where the stock must be at the long call's expiry for the position to break even, before any further premiums collected along the way.
160 + 69.30 = $229.30
The net debit as a percentage of what the equivalent share position would cost. It shows the leverage, and therefore also the risk: a decline that costs a shareholder 10% costs this position considerably more.
6,930 / 22,540 = 31%
Which combinations we show
Every candidate starts from a stock that already passes our screening filters: US listed, up more than 10% over three months, within 10% of its recent top, above its 50- and 200-day moving averages, and below 30% volatility over the last 90 days. ETFs qualify too.
The long leg must:
- expire in 120 to 800 days — per stock we look at the three expiries nearest to 180, 365 and 540 days
- per expiry, be one of the two strikes whose delta is closest to 0.83 or 0.88, with a floor of 0.80 (tracks the stock) and a cap of 0.93 (no deeper than needed)
- have a strike between 55% and 95% of the share price
- carry no more than 7% agio — time value per year, measured against the share price
- be sensibly priced: ask no higher than the share price, bid at least 95% of intrinsic value, bid/ask spread under 20% of mid, and two checks against stale quotes (a carry test and a model-price test)
There is no open-interest requirement on the long leg. In our data, open interest did not predict the spread, and the spread is what you pay.
The short leg must:
- expire in 20 to 60 days
- sit 2% to 15% above the current price
- pay at least 1% of the share price in premium (the covered call list uses 2%; a lower floor here lets the short strike sit further out of the money)
- have at least 5 contracts of open interest and a bid/ask spread under 50% of mid
And the combination must:
- have a width (short strike − long strike) of at least the long call's price, so that max profit is positive
- return at least 1% per cycle
- have a theta factor of 3 or more: the short leg must earn at least three times per day what the long leg loses per day in time value
- have a long-leg bid/ask spread no larger than the max profit (spread cost ≤ 1×)
We show at most ten combinations per stock, spread over short-delta buckets of 0.25, 0.30, 0.35 and 0.40, so that each stock appears with both tight and wide shorts. A short with a delta of 0.40 or more carries the Near ATM label: it pays the most premium and is the most likely to end up in the money. That is a label, not a filter — the choice is yours.
All formulas in one place
With K1 as the long strike, K2 as the short strike and S as the share price. All amounts are per share; the cards multiply net debit and max profit by 100, since one contract covers 100 shares.
extrinsic = long ask − intrinsic
extrinsic % = extrinsic / K1 × 100
agio % = extrinsic / DTE × 365 / S × 100
net debit = long ask − short bid
width = K2 − K1
max profit = width − net debit
max profit % = max profit / net debit × 100
max loss = net debit
return per cycle= short bid / net debit × 100
cycles = max profit / short bid
breakeven = K1 + net debit
capital ratio = net debit / S × 100
net delta = long delta − short delta
leverage = net delta × S / net debit
theta factor = short time value per day / long time value per day
spread cost = (long ask − long bid) / max profit
Two of these deserve a warning. Return per cycle describes the position at today's prices only — what a later short call will pay depends on volatility and the share price at that time, so it is not a rate you can multiply out over the year. Cycles compares the payout at assignment to the premium collected right now. It is a measure of headroom, not a forecast: what a second or third short call will pay is unknown, so the number says how much room the position has relative to today's premium, not how many cycles you will actually get.
Managing the position
The intent is to hold the long call and write against it repeatedly. Closing it and rebuilding on another stock costs the bid/ask spread on the long leg plus commission — roughly 1% of the debit each time, or about a fifth of a typical cycle's return. Switching every month can cost more over the life of the position than the extrinsic value you were trying to avoid paying.
Reasons to close or roll the long leg:
- The trailing stop on the underlying is breached. The long call is your stock position — treat a breach the same way you would treat one on shares.
- Delta falls below 0.80. The call no longer tracks the stock and has stopped doing the job it was bought for.
- Time to expiry drops below roughly 120 days — the screener's own lower bound. Decay accelerates from here. Roll to a longer-dated call on the same stock rather than closing out, and do it while there is still room for at least one more short call.
Rolling means closing the existing option and opening a new one with a later expiry, usually as a single order. It applies to the short leg each cycle as well as to the long leg once a year or so.
What this screener does not tell you
- It screens for opening new positions. It does not track positions you already hold.
- It flags earnings and ex-dividend dates that fall before the short call expires, but does not filter on them. If a dividend exceeds the short call's remaining extrinsic value, early assignment becomes likely; writing over earnings is a choice, not an error.
- Prices are from the most recent update and may have moved. Always check live quotes before trading.
- Delta is modelled, not quoted. See Delta and net delta above for how the volatility is chosen.
Disclaimer: StoplossAlert provides information for educational purposes only and does not constitute financial advice. Options carry substantial risk of loss.