February 5, 2026

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Date Entered: February 3, 2026
Status: Position Open (5 Contracts)

PMCC Spreadsheet

Trade Thesis (Why This Exists)
This is a Poor Man’s Covered Call (PMCC) structured as a diagonal spread designed to:

• Capture elevated implied volatility via the short call
• Maintain long-term bullish exposure via a deep ITM LEAP
• Use active management to avoid assignment and gamma risk
• Generate repeatable income while preserving upside optionality

PFE does not have any major earnings this week, so the setup is intended to sell premium with defined-risk bullish exposure.

📋 Trade Summary (Actual Entries)

Long Leg (LEAPS):

• 5× Jan 17, 2027 $20 Call @ $6.30

Short Leg (Income):

• 5× Mar 6, 2026 $27.50 Call @ $0.30

Net Debit:

• $6.00 per spread
• $3,150 total capital deployed

Break-Even (at entry):

• $26.30

Stock Price at Entry:

• ~$26.49

Why the $27.50 Short Call Was Chosen

• Strike sits above recent trading ranges, reducing assignment risk
• Premium is elevated relative to historical volatility
• Balances:
  • Rent collection (~4.76% vs LEAP cost)
  • Gamma exposure
  • Roll flexibility

Note: This is not a “set and forget” strike—close or roll if PFE approaches $27.50 near expiration.

📜 The Golden Rules (Non-Negotiable)

• Never let the short call expire ITM
• Close or roll short calls early to avoid assignment
• Monitor Extrinsic Value, not individual leg P/L
• Ignore individual leg P/L: evaluate net liquidation value

📈 Profit & Risk Framework

Outcome Scenarios at March Expiration

Scenario	PFE Price	Result
Strong Rally	$30–$35	LEAPS appreciates; short call likely rolled for credit
Ideal Outcome	<$27.50	Short call expires worthless; keep full premium
Flat / Modest Up	$26–$28	Income cycle completed; sell next call
Down Move	<$24	LEAPS loses value; shift to repair & income mode

Cycle Income Potential:

• $150 per cycle per 5 contracts
• Repeatable if managed correctly

⚡ Why This Works for PFE Right Now

• High Rent-to-Strike Yield: $0.30 on a $27.50 strike (~4.76% vs LEAP cost over 31 days)
• Technical Awareness: Resistance near $27.50
• Short call allows management before this zone

🛠 Post-Expiration / Management Plan

Short Call Decision Matrix

Scenario	Price Zone	Required Action	Objective
IV Crush / Calm	<$26	Buy to close at 60–70% profit	Lock in income, sell next cycle
Do Nothing	$26–$27.50	Let time decay work	Capture full premium
Gamma Test	$27–$28	Roll $27.50 → $28–$30	Restore upside runway
Blowout	>$30	Close diagonal package	Preserve LEAP time value
Repair Mode	<$24	Buy back short calls, consider roll LEAP down	Accelerate recovery

🛡 LEAPS Repair & Capital Preservation Protocol
Aggressive Roll-Down (Primary Repair):

• Sell $20 LEAPS, buy $18–$19 LEAPS
• Restores delta, lowers breakeven

Income Compression Strategy:

• Sell nearer-dated calls closer to ATM
• Accept capped upside temporarily

Advanced Only: Ratio repair converts trade to undefined-risk; use with margin awareness.

🚦 When to Cut and Walk Away

• 50% Capital Rule: If net position value < ~$3.15 per spread
• Preserve remaining capital; avoid structural panic

🔍 Greeks (What Actually Matters)

• Delta (Directional Bias):
  • Long LEAP ≈ 0.80
  • Short call ≈ 0.20
  • Net delta ≈ +1.00 (~100 shares synthetic)
• Theta & Vega: Short call theta offsets LEAP decay; LEAP vega gains if IV rises
• Gamma Warning: If PFE trades above $27.50–$28, short call delta rises quickly. Close or roll early.

🧪 Stress Tests
Baseline: PFE ≈ $26.49

• Fast Rally: $26 → $28 quickly
  • Short delta rises, roll $27.50 → $28–$30
• Slow Grind Lower: $26 → $24–$25
  • Short decays, LEAPS loses delta slowly
  • Let short expire or close ≥60% profit
• Hard Breakdown: $26 → $20–$22
  • Sell nearer-term calls, consider roll LEAP down
  • Optional: sell closer OTM calls (≥0.25 delta) to recover income
• Never roll long LEAPs unless capturing profit or repairing extreme drawdown

🔒 Failure Conditions

• Stock collapses below LEAP strike and stays
• Time falls below ~9 months with no recovery
• PFE is well above the LEAP strike, so structure intact

📌 Net Result Across All Scenarios

Scenario	Outcome
Fast rebound	LEAPS wins, short call managed
Chop / drift	Shorts compound quietly
Selloff	Structure survives, income improves

PMCC works best when rules are followed—less intervention, more consistent results.