October 24, 2026 · by Happy Harry Huckleberry

My playbook for using a deep in-the-money LEAP (a long-term stock option, typically good for a year or more) as a stock replacement and selling short-dated in-the-money calls against it — giving up upside to get paid every week. Built from the long lineage of covered-call practice — the encyclopedia and screener literature plus practitioner rules distilled into my own (sources in §12).

Most covered-call traders sell calls out of the money. They want the premium and the stock to run. I do the opposite: I sell my short calls in the money, deliberately capping my upside, because I’m not trying to catch the move. I’m trying to collect time value over and over, with a cushion underneath me.

This play has been around a long time. Call it what it is: an in-the-money (ITM) covered call — with the shares replaced by a LEAP. Selling in-the-money covered calls is the older, defensive form of a trade most people now meet as its out-of-the-money cousin; financing it with a deep-ITM LEAP instead of stock is the modern, capital-efficient descendant (the mainstream literature calls the family a “covered call without stock” — a calendar spread; see the textbook note in §2). It is a variation of the poor man’s covered call (PMCC) — a long-dated deep in-the-money call used as a stock replacement, de-risked by selling short-term calls against it. The difference is where the short strike sits, and that one decision changes the whole character of the trade.

This playbook lays out my structure, entry filters, management rules, and risks — using worked examples and rules distilled from decades of covered-call practice (see §12).

Status tags: [adopted] in my rules · [contrast] studied, not used · [proposed] rule written, no paper trade yet · [mixed] blends adopted and contrast · [open] lead with no trial yet. Full legend and history in §14.

0. If you’re new: the words in 60 seconds

Options have their own dialect, and early drafts of this playbook added made-up words on top (gates, satellites) — those are gone now, replaced with plain terms throughout. This box translates the real trader terms. You don’t need to memorize it; each one is used plainly where it appears.

• Stock option — a contract covering 100 shares. A call is the right to buy at a fixed price; a put is the right to sell.
• Strike price — the fixed price written in the contract.
• Expiration / days left — the date the contract ends; how much time is on it.
• Premium — the price of the option contract itself.
• In the money — the contract already has built-in value (a call whose strike sits below the stock price).
• Intrinsic value — that built-in value; the cushion underneath my shorts.
• Extrinsic (time) value — the extra paid for time remaining; the part I harvest as income.
• Delta — how many cents the option gains when the stock gains $1 (90 delta ≈ 90 cents).
• LEAP — a long-term option, typically good for a year or more.
• Selling a call / the short — selling someone else the right to buy; I keep their payment and owe them shares if it lands in the money.
• Roll — close the current short and open the next one (usually next Friday’s) in a single move.
• Assignment — being forced to deliver shares on a short I sold; the max-profit case for that leg, handled same-day (§7).
• Exercise — using an option to actually buy or sell the shares (usually wasteful — it destroys leftover time value).
• Spread / diagonal — two option legs traded as one position (mine: long LEAP plus short weekly).
• Volatility (IV) — how big the market expects price swings to be; high IV means fatter premiums.
• VIX — the market’s fear gauge; my volatility proxy when replaying history.
• Slippage / trading costs — what wide bid-ask spreads and commissions skim off every trade.
• Drawdown — a peak-to-trough fall in account value.
• Profit factor — total gains divided by total losses (above 1.0 means winning).
• T-bills — ultra-safe short-term government savings; my do-nothing baseline.
• Margin — collateral the broker demands; short stock needs it until closed.
• Annualized — a return stretched into a per-year rate so periods compare.
• Ex-div — the day a dividend pays out; it can trigger early assignment.
• 0DTE — contracts expiring the same day; lottery tickets, not my game.
• Sharpe lens — judging results by return-per-unit-of-risk instead of raw percent.

1. The structure in one paragraph

Buy a long-dated call (roughly 360 days, sometimes 180–200, sometimes up to two years) that is deep in the money — 90–95 delta — as a substitute for owning the shares. Then sell a short-dated call (usually 7 days, Friday expirations) that is in the money, around 70 delta, sized near the expected move or a nearby support level.

The short call contains two things:

• Intrinsic value — the cushion between your sold strike and the current price. This is your downside protection.
• Extrinsic (time) value — the part you’re actually harvesting. This is the income — or rather, the basis reduction: a label I’ve tightened since adopting the tastylive reframe (§8). The harvest only becomes income when the whole position nets positive; until then it’s a reduction of my effective cost. The ledger treats it that way.

You are not trying to be right about direction. You are trying to be paid while being approximately direction-neutral.

2. Why in the money? The delta math

An option chain has a useful property: extrinsic value peaks at the money and falls off in both directions. A 30-delta out-of-the-money call has little extrinsic. A 70-delta in-the-money call has roughly the same extrinsic as that 30-delta call — but it also carries intrinsic value underneath it.

That’s the trade: same income, more protection.

	Typical PMCC	ITM covered call
Long call delta	70–80	90–95
Short call delta	~30 (OTM)	~70 (ITM)
Net delta	~40–50	~18–25
Downside cushion	Little	Intrinsic + extrinsic
Upside	Uncapped-ish	Capped by design

That net delta difference is the whole point. A 50-point delta position is a leveraged bet on the market going up. An 18–20 point delta position barely notices a normal week. My aim is to sleep well: if the market drops 2% while other traders watch their LEAPs fall 20%, my position is roughly flat because the short call’s intrinsic gain offsets the long call’s intrinsic loss.

Delta in plain English: a 90-delta option gains about 90 cents when the stock gains $1; a 70-delta option gains about 70 cents. Higher delta = moves more like the stock itself.

The textbook version of the family [contrast] — and the ratio idea

Source: Investopedia, “Master Covered Calls: Income Generation Without Stock Ownership” — https://www.investopedia.com/articles/optioninvestor/10/covered-call-no-stock.asp (updated Aug 2026). The encyclopedia version of the stock-replacement trade: buy a longer-dated, lower-strike call in place of stock, sell a shorter-dated call against it — a calendar spread. Two things to file.

The OTM short is the textbook default [contrast]. The textbook worked example: stock $46.56, buy 3 January 40 calls @ $10.80, sell 2 December 45 calls @ $5.90 — cost $2,060 vs $4,066 for the stock buy/write; when the stock ran to $68.20 by December expiry, the calendar made 89.8% vs the covered call’s 10.7%. Note what the short is: the December 45 against a $46.56 stock is out of the money — the “Typical PMCC” column of the table above, made concrete. The ITM depth is where this playbook deliberately diverges from the textbook: capped upside, cushion underneath, income as the objective instead of participation. That 89.8%-vs-10.7% result is one cherry-picked bull run, as the article itself concedes (“the results of one ideal example by no means guarantee that one particular strategy will always perform better than another”) — and in that bull run the stock covered call still made more dollars on more capital; the percentage win is the capital-efficiency story, the same point §11 makes honestly.

The ratio idea [contrast — the unlimited-upside sibling]. Buy more longs than shorts (the textbook’s 3:2) to keep unlimited upside while still harvesting extrinsic — the mirror-image choice to mine. It changes the character of the trade: more net delta, more vega, more capital at work, and no weekly income rhythm to manage against. Filed, not adopted: if upside participation ever matters more to me than income consistency, this is the published version to trial — as its own structure, not a bolt-on to this one.

The assignment-by-construction test [adopted — design check, corrected]. A general rule from the LEAPS-diagonal lineage (The Blue Collar Investor, §12): build the trade so that if assigned, the strike spread plus the short premium exceeds the cost of the long — assignment is then a profit, not a rescue. Applied literally to this playbook’s own QQQ example, that test fails at entry: $292 of strike spread + $12.44 premium = $304.44 against a $325 long — short by ~$20.56, which is almost exactly the LEAP’s ~$24 extrinsic minus the short’s ~$3.44. That is not a broken design; it is the reason the assignment response (§7) forbids exercising the long to cover — exercise destroys the LEAP’s remaining extrinsic, which is where the ~$21 lives. With the buy-shares response instead, an immediate assignment settles at roughly the harvested extrinsic (~+$3.44/share here) with the LEAP still open, and every move above the strike that costs the short a dollar pays the long ~90–95 cents of it back. So the test as this playbook runs it: an immediate assignment, covered with bought shares, must settle at worst near-neutral — and positive net delta plus captured extrinsic delivers that by construction. Wired into Stage 4 (§4A): reject pairings where it is clearly negative.

The one rule that protects the structure: avoid delta inversion

If the long is 90 delta and the short is 70 delta, the position is net +20 delta. But if the stock rips higher, both deltas climb — and the short’s can overtake the long’s (toward 95 while the long pins near its ceiling) — and suddenly the position is net negative delta. You lose money while the stock goes up. Traders call this delta inversion, and my rule from it [adopted]: buy the long deeper than 80 delta rather than the standard 70–80.

Why not just sell a cash-secured put?

A cash-secured put ties up the full assignment cost. With QQQ near $741, a 440-strike cash-secured put would require roughly $44,000 of cash held aside. The equivalent 440-strike LEAP cost about $32,500 — and still tracks the stock nearly one-for-one. You get similar exposure and the same premium-selling economics with materially less capital committed, plus the ability to run several positions without a margin-heavy balance sheet. Correction, because that comparison flatters the LEAP: a 440 put with QQQ at $741 is far out of the money and pays almost nothing, so $44k-vs-$32.5k is apples to oranges. The honest comparison is the LEAP against 100 shares (~$74,100) or against a ~70-delta put. The capital-efficiency point survives; the framing doesn’t.

Put-call parity sharpens the question. On stock, a deep-ITM covered call is synthetically the same trade as a cash-secured put at the same strike: buy shares, sell the K call, and you have manufactured the K put — payoff for payoff, delta for delta. The differences are carry (dividends, interest on tied-up cash) and small pricing gaps. What breaks the equivalence here is the LEAP: a long call is not stock — delta under 1, positive vega, a fraction of the capital — so the LEAP-financed ITM covered call is not a put in disguise; it is the capital-efficient, slightly delta-reduced variant of it. That is the real answer to “why not just sell the put”: this structure keeps the put’s payoff shape while tracking the stock on a fraction of the capital, and adds vega the put seller never gets.

3. A worked example (QQQ)

Illustrative numbers from a QQQ chain, QQQ trading around $741. Recompute everything against the live chain before trusting it.

Leg 1 — the long (stock replacement)

Field	Value
Underlying	QQQ
Expiration	~361 days (1 year)
Strike	440
Delta	~90
Premium paid	~$325/share = $32,500/contract
Extrinsic paid	~$24/share

The $24 of extrinsic is the “rent” on the position. Spread over 52 weeks, that’s roughly $0.46/week on the sticker — superseded by the correction below (real rent ~$8, or ~$0.15/week, against shares-plus-T-bills). Everything the short call generates above the real rent is profit. Correction: that $24 isn’t pure rent — a large part of it is financing on the $440 strike, net of dividends. My fair benchmark for the long leg is shares plus T-bills (ultra-safe government savings) on the ~$41,600 of freed cash, not shares alone. Rough cut with stated assumptions (~4.5% short-term rate, ~$3.50 of QQQ dividends across the year): 440 × 4.5% − $3.50 ≈ $16 of the $24 is carry, leaving ~$8 of genuine volatility premium. Two ways to read it: against shares-plus-T-bills on the freed cash, the rent is ~$8; against cash earning nothing, it’s the full ~$24. Recompute with live rates before trusting it.

Leg 2 — the short (income)

Field	Value
Expiration	7 days (next Friday)
Strike	732
Delta	~70
Credit received	~$1,244/contract
Extrinsic captured	~$363/contract

The short is $9 in the money at entry, so ~$900 of that credit is intrinsic — money you’d hand back if assigned — and ~$363 is the time value you’re actually trying to keep.

The arithmetic that matters

$363 of extrinsic against $32,500 of capital is roughly 1.1% per week. If the stock simply stays above 732, the short leg’s extrinsic decays into your account regardless of whether QQQ finishes at 600 or 900 — the LEAP itself is a different story at 600, deeply down; the claim covers the short leg only. That weekly percentage is the entire strategy in one number: about 57% simple over a year (1.1% × 52), or roughly 77% compounded (1.011^52 − 1 ≈ 76.6%) if every single week lands. For scale, the classic income-trader’s yardstick is 2%/month ≈ 24%/year (the stock-based framing used by Born To Sell) — a ~1%/week harvest runs at the same pace. Reality check, stated plainly: those are the arithmetic ceilings, not forecasts — every down week, gap, and roll cost comes out of that stack, and no week is guaranteed. The ledger (§13) exists to measure what actually lands.

4. Entry mechanics: 90% of trading

Exits are mechanical. Entries are where the edge lives. I run four filters before I ever open an options chain [adopted].

Filter 1 — Liquidity

Trade names with tight, deep option markets. Wide bid-ask spreads on a 2x or 3x leveraged ETF can strip out most of a week’s income on the round trip. This single filter disqualifies most of the high-flyers people recommend on social media.

Filter 2 — Fundamentals

Not a deep-dive, but enough to know you aren’t short-volatility on a broken business:

• Revenue growth
• Earnings-per-share growth
• Return on equity
• Free cash flow (skipped for indexes and commodities)

Filter 3 — An uptrend

Higher highs and higher lows. Price above the 200-day and 50-day moving averages; the 8 EMA above the 21 EMA. Any reasonable trend definition works — the point is that you are not fighting the tape.

Filter 4 — A pullback inside that uptrend

This is the timing layer. I want the trend, but I want to buy the dip:

• Pullback to a moving average (21 EMA, 50 SMA) or prior support
• An Elliott-wave ABC correction, entering in wave 2 or 4 ahead of a wave 3 or 5
• Fibonacci pullback zones, particularly the 50% and 61.8% levels

The deeper and cleaner the pullback, the longer-dated the LEAP I’m willing to buy — 180–200 days for an ordinary good setup, 1.5–2 years if it looks like a generational entry.

The watchlist is tiny

Roughly 20–22 stocks plus a handful of indexes. My main vehicles: SPY, QQQ, GLD and SLV — no single-company risk, deep options, and no earnings-gap surprise — along with large, liquid names such as AMD, Micron, UNH, HOOD, ARM and NOW. Side-position discipline [proposed] (mine — the tension between indexes-only purism and the temptation of fat single-name premiums resolves with caps instead of vibes): at most 4 concurrent side positions and 25% of LEAP capital combined — about 3% of account value each at full deployment, so a full side-position stop costs ~1% of the account, not the 2–3% main-position band; 30-day IV under ~80% at entry; earnings always outside the short’s life. Starting values, changed only from my ledger. [open — CPA conversation first, no trial yet]: cash-settled European-style index options (SPX/XSP) remove early-assignment and dividend-exercise risk and may get different US tax treatment.

Why indexes and commodities dominate: with a single stock, an earnings gap can blow through your cushion overnight. With SPY, QQQ, GLD or SLV you are trading a market, not a management team.

4A. My stock-selection funnel [proposed] (tiers first, numbers throughout)

The classic filters (good liquidity, solid fundamentals, uptrend, pullback to support) are usually taught qualitatively — no numbers. My edge is making each stage numeric and logging rejects so the filters can be validated later.

Tier first. Main (SPY, QQQ, GLD, SLV — possibly SPX/XSP after the CPA conversation) vs Side bets (single names: smaller size, stricter filters, capped count).

Stage 1 — hard liquidity checks (pass/fail). Weekly expirations exist; tight bid-ask on both the LEAP strike and the weekly ITM strike (starting cap, measured against the right denominator: round-trip spread cost ≤ 25% of the position’s expected weekly extrinsic — option price is mostly intrinsic on deep-ITM strikes, so % of price understates the damage; amortize the LEAP leg’s round-trip over its expected holding period); meaningful open interest on those strikes; no leveraged/inverse ETFs; side positions: large cap, earnings outside the short’s life.

Stage 1 fallback [open — tastylive, §8]: if no weekly chain passes the spread gate, the fallback is a monthly (~30–50 DTE) ITM short against the same LEAP — not a forced thin-extrinsic weekly that fails the check. Same harvest logic, slower cadence: Stage 4’s carry ratio and the cushion math get recomputed for the longer tenor, and the capture rule runs on a checkpoint schedule (the 7/3/1-day schedule, §8) instead of the Wednesday/Thursday rhythm. This is the slow-trade case; §10’s stay-in-T-bills rule covers the no-trade case. Untrialed until a weekly screen actually fails with a monthly chain passing alongside it.

Stage 2 — quality (side bets only). Positive revenue and EPS growth, ROE, free cash flow, manageable debt. Plus the net-debit ownership test [adopted — Born To Sell’s rule, adapted to the LEAP]: the stock-based original is “only get involved with stocks you wouldn’t mind owning at the net debit price of the transaction, because if you do enough covered call trades then that will happen with some of your trades.” My version: only buy the LEAP on an underlying I’d still be content holding after a drawdown — because if I run this long enough, some positions will leave me holding the long through exactly that.

Stage 3 — trend + pullback, as numbers. Price > 200-day; 50-day > 200-day; 8 EMA > 21 EMA; pullback to within ~1 ATR of the 21 EMA/50 SMA or a 50–61.8% retracement of the last swing; optional relative strength vs SPY.

Stage 4 — option-economics test (the missing piece). From the live chain compute: LEAP annual extrinsic as % of stock price (the rent); weekly short extrinsic as % of capital; carry ratio (weekly short extrinsic ÷ weekly LEAP decay); cushion in expected-move units (require ≥1 to start — where ‘cushion’ means intrinsic plus short extrinsic, i.e. breakeven distance ≈ premium ÷ long delta, which is what brings the §3 trade to ~1; intrinsic alone covers only ~0.6 of a ~2% weekly move); net delta and both breakevens; round-trip slippage as % of weekly extrinsic; the assignment-by-construction check (§2): an immediate assignment covered with bought shares must settle at worst near-neutral (captured extrinsic + the net-delta giveback) — reject pairings where it is clearly negative. Reject names where rent or slippage eats the income. Normalize extrinsic by expected move to compare calm ETFs with volatile stocks fairly. And read fat extrinsic on a deep-ITM strike the way the market writes it: priced gap risk, not free income — if a far-ITM strike pays a rich premium, the market thinks the strike is reachable.

Stage 5 — portfolio fit. Correlation to the current book (my tech basket counts as one bucket), sector cap, aggregate net delta and notional after adding the candidate.

Stage 6 — score and rank. One 0–100 score with starting weights: liquidity 20, quality 15, trend + pullback 30, option economics 25, portfolio fit 10. Log scores for rejects too, so I can check later whether the filters add value.

Sourcing: broker scanners, Finviz/TradingView (above 200-day, 50 > 200, RSI < 50, volume + optionable), sector-ETF strength. Stage 4 needs a small script or spreadsheet.

Test before trusting [adopted]: backtest the Stage-3 signal on price alone (60-day forward return/drawdown vs random days), then paper-trade ~3 months before real size. Paid historical-chains data if I go deeper. The tools circulating in this space (Option Omega for backtesting, OptionStrat for visualization) are unevaluated leads for this step.

5. Strike selection

Long leg: go out ~360 days by default, deeper than 80 delta, typically 90–95. Extend the duration when the pullback is unusually attractive. The delta floor exists specifically to prevent inversion.

Short leg: 7 days out, around 70 delta, placed at one of three reference points:

1. The expected move — the market’s own one-week implied range
2. Average true range — a similar volatility-based measure
3. A support level — if the realistic pullback is $5, sell $5 in the money

Deeper than strictly necessary is fine — the point is sleeping well at night. An at-the-money or barely-in-the-money short gives up the cushion for a marginal increase in extrinsic, which is a bad trade in this framework.

The protection-vs-income slider [adopted — framing]

A stock-based example makes the strike-depth tradeoff explicit: buy TSLA at $440, sell the $380 call (~31 days out) for $65 = $60 intrinsic + $5 extrinsic kept no matter what; sell the $340 instead and protection grows but extrinsic shrinks to ~$2–3. Deeper strike = more cushion, less pay; shallower = more pay, less cushion. Same slider this playbook works with at 7 days left — the monthly-tenor version just shows it slowly enough to see. The psychology reframe transfers too: committing to sell $60 below your purchase looks like a guaranteed loss until you count the credit — then it’s a guaranteed gain plus a floor.

Weekly-tenor corroboration [mixed — math corroborates, high-beta not adopted] — and a high-beta divergence

A second set of numbers at the weekly tenor: buy 100 TSLA @ $411, sell the $395 call for $2,682 — below $395 keep the whole premium (breakeven far under purchase), above $395 called away at $395 for a $1,077 net credit. Two things to file: (1) breakeven-lowering as the edge versus ATM calls or outright stock — a cleaner metric than “cushion” that I now use [adopted] when comparing candidate shorts; (2) running this specifically on high-beta names for fat premiums diverges from my index/quality preference (§4) — filed as a contrast, not adopted [contrast]: fatter weekly pay for wilder gaps against the cushion.

6. Exits: four ways out

The risk rules decide the exit before entry. Four exits cover every way a diagonal can end — three from the classic playbook [adopted], plus the LEAP roll that rescues a position whose thesis still holds [proposed]:

1. Profit target: +50% to +100% on the LEAP (including collected premium). Sometimes I let a winner run past 100% when there’s plenty of duration left.
2. Time stop: ~30–45 days — unless item 4 fires first. If the thesis is dead or no roll is worth buying, exit here; otherwise the LEAP roll supersedes this stop. Extrinsic decay accelerates into expiration; you do not want to be paying accelerating rent on a long-dated position you no longer need.
3. Stop loss: ~30% of the LEAP cost, net of collected call income. Sized so that a full stop costs 2–3% of account value. If the thesis breaks earlier — the trend reverses, the setup invalidates — exit before the 30% mark.
4. LEAP roll: ~90–120 days left while the thesis holds (fills the lifecycle hole). ‘Never roll the long’ means never roll it to defend a week — the long itself still expires. At ~90–120 days left with thesis intact, roll out to a fresh LEAP (cost = the new extrinsic, budgeted like rent); for large books, ladder newer LEAPs beside old ones instead of a single roll.

The stop-loss rule (item 3) is the position-sizing formula in disguise:

If a maximum loss must equal 2–3% of the account, and the stop is 30% of the LEAP, then each LEAP should be roughly 7–10% of account value.

7. Management and rolling: harvesting extrinsic, not premium

This is where most covered-call traders go wrong. They watch the premium and take profit at 50% of it. I watch the extrinsic that remains.

The main rule [adopted]

Close the short when 80–90% of the extrinsic has been captured — then roll out to the next expiration.

In practice, selling on a Friday means hitting that threshold around Wednesday or Thursday of the following week. On a fast move — an earnings pop or a strong sector day — extrinsic can collapse in two days, and I roll early.

If I close early in the week, I may re-sell the same Friday expiration to re-establish deltas and collect more extrinsic. That’s how a week occasionally produces 1.3–1.4% instead of 1%. If it’s already Wednesday or Thursday, I roll to the next Friday.

I never touch the long to defend a week. Only the short gets rolled for income; the long itself still rolls on lifecycle (see §6 above). The LEAP is otherwise a fixed piece of furniture in the trade.

One tenor note: the 80–90% capture rhythm above is written for 7-day shorts — hit around Wednesday or Thursday. The monthly fallback (§4A, §8) can’t be run on a weekday rhythm; it needs dated checkpoints instead, and the capture threshold itself is a starting value to re-derive for the tenor, not carry over unexamined.

Rolling mechanics [adopted]

Every roll is one combined order — buy-to-close the current short and sell-to-open the next in a single spread ticket. Pricing the pair as one spread usually beats two separate fills, especially on wider chains (§7 roll math’s limit-order rule still applies).

Scenario	Action
Normal decay, 80–90% extrinsic captured	Roll the short to next Friday, ~70 delta
Big pop higher, extrinsic gone early	Roll up in the same expiration to reset deltas
Price falls toward/through the short strike	Roll down for a credit, capturing intrinsic
Earnings or event risk	Keep extrinsic above the dividend/event; consider wider strike
Any roll	Price it as (strike improvement × shares) ± net credit/debit — the one-number rule
Runaway short, unwilling to sell or buy back at a loss	Buy a farther-dated call at the same strike (diagonal hedge — adapted: my ‘longer date’ is a second LEAP beside the first)
Thesis broken	Close the whole trade

Assignment response (procedure [proposed])

Assignment on the short is the max-profit case for that leg, not an emergency — but it leaves short 100 shares against the long LEAP, so act the same day: (1) don’t exercise the LEAP to cover — exercise destroys its remaining extrinsic; buy shares in the market and keep the LEAP; (2) check margin the same day — short stock needs margin until closed, so size every position so one assignment can’t trigger a call; (3) log what the trade means for taxes — assignment can realize gains earlier than planned (see §8 tax notes); (4) confirm before going live that the broker’s approval level covers the diagonal (long-dated long plus short weekly on the same underlying). Early assignment only pays the exerciser when the short holds no extrinsic — exactly what the 80–90% roll rule prevents.

When price falls

This is the scenario people fear, and it’s where the ITM covered call earns its keep. Because you started $9–$12 in the money (intrinsic plus extrinsic), a normal week’s decline doesn’t reach your strike. If it does:

1. The short call’s intrinsic gain offsets the long call’s intrinsic loss — they cancel.
2. You still keep some extrinsic.
3. Rolling down for a credit re-establishes a fresh cushion and fresh extrinsic at a lower strike.

You are not defending a losing stock position; you are re-centering a spread. The real risk is not a bad week — it’s a persistent downtrend, where the long loses more than the short can earn back.

A stock-based contrast case [contrast]: the runaway short without the LEAP

What managing a runaway short costs without the ITM covered call — the regret situation §8’s whipsaw discussion is about. A stock-based example (110 shares of SMH): bought @ $318.70, sold the $335 call (~5% OTM) for $584.33; stock ran to $351.14 before expiry. Doing nothing and letting assignment happen = $1,630 appreciation + $584 premium = +$2,214.33 — a legitimate option, especially if overexposed. The roll menu (November expiry, midpoint prices, weekend wide spreads acknowledged):

Roll	Economics	Delta read
Straight out, same $335 strike	~$7.20 (~$718 credit)	~70 delta — assigned ~70% of the time, keep shares if back below $335 (~30%)
Up and out for a credit ($340, or $345 at ~breakeven)	Small credit + $500–$1,000 more upside if assigned	~60 delta at $345
Out to OTM $360 for a ~$780 debit	$2,500 upside potential for ~$800 cost	44 delta — keep shares better than 50/50

The rules of thumb that transfer: rolling is just buy-to-close plus sell-to-open — there is no magic undo button; pick strikes by position goals and exposure, not chart indicators; and the reasonable default is to roll straight out or slightly up, staying in the money “with a little bit of security” — which converges with this playbook from the opposite direction. One more from the rolling literature, kept as a caution: each roll up-and-out can take a loss on the front month, and nothing is secured until the new short expires — in a runaway market, rolling up-and-out repeatedly compounds those front-month losses. That’s the trap this playbook avoids by wanting assignment (the max-profit leg) instead of dodging it: don’t roll to escape assignment; roll because the extrinsic is harvested.

Why this stays a sidebar: no LEAP, no extrinsic-harvest roll rule, no weekly income target — a buy-and-hold frame with partial coverage. It is the before-picture: the situation the ITM covered call is built to avoid being in.

Three more transferable points from the stock-based world [mixed — dividend math adopted]: (1) the delta-as-security rule: a higher-delta short is more likely to be called away but carries more protection (a typical chain read: ~72% assignment probability at a near-the-money strike vs ~4% a few strikes higher); (2) the inherited ITM short: when a runaway stock turns your OTM short deep ITM, rolling further out for a small but secure credit plus a coming dividend can turn a 5–6% annualized tail into 12–20% — dividend-aware rolling as yield boost, consistent with my extrinsic thinking; (3) always compute the return with the dividend included (illustration: 400 shares @ ~$48, $47 call, $585.30 premium minus $430 of basis = ~$155 net ≈ 11.8% annualized over 25 days, plus the dividend taking it to ~22.4%). I adopt the included-dividend return math; earnings-drop/dividend-recovery calendar patterns are an event style, not mine.

The Sharpe lens, the short-side mirror, and assignment-as-entry [mixed]

Three ideas from the assigned-entry school of stock-based ITM covers, kept on their merits:

The Sharpe lens [adopted]. Judge performance by return per unit of risk, not raw weekly percent: a ~1%/week trade at low volatility beats double-digit 0DTE day trades on a Sharpe basis. This is now the playbook’s performance lens (§13’s go-live gate is written in these terms).

The 3+1 steps. (1) Sell a put where I’d love to own the stock, or a call where I’d love to short it; (2) get assigned; (3) cash-flow the shares by selling the in-the-money cover, rolling weekly; (4, bonus) supercharge with a credit spread against it when deltas allow. My entries stay the §4 pullback filters — the technique is noted, not adopted as my entry process.

The short-side mirror [open — new structure, untrialed]. Short the stock, sell an ITM covered put: the same up/flat/down cushion profile inverted. Untrialed; stays [open] until tested.

Assignment-as-entry [open]. Patient, assignment-driven entries (months of rolling puts to get filled at your price) — a different entry philosophy from §4’s filters. Noted, not adopted.

A cautionary tale: the one-for-one lesson

Above your short strike, a deep-ITM short moves ~one-for-one with the stock: the $60/$55 example ($5.50 = $5.00 real money + $0.50 time) falls to ~$4.50 if the stock slips to $59, ~$3.50 at $58 — the time-value sliver wiggles, the real money tracks tick for tick. This is what misunderstanding it costs: a trader worked his cost basis down via prior calls, then sold a deep-ITM short collecting most of the premium upfront, expecting to buy it back cheaper on a fall that never came — then got assigned early the day before ex-div, netting under half a percent on the final leg. My rule from that pain [adopted]: never open a deep-ITM short expecting to scalp it back on mild weakness — above the strike there is nothing to scalp. The short only loses value if the stock falls below the strike, where the shares are losing too. Related usage note: deep ITM is for when you want true downside protection into expected weakness — a milder version of my always-on harvest, filed as framing, not mine.

Roll math [adopted]: price the strike move, not just the credit

Evaluate every roll as (strike improvement × shares) ± net credit/debit, as one number. A GOOG-style demo: 300→310 = $10,000 of strike value + $1,120 credit = $11,200 total benefit with no taxable event; 300→350 = pay $25 to gain $50 — a debit worth paying, judged per-contract rather than feared as a lump sum. Second, the roll ladder: strikes walked 85→95→115→125→145→150→160→165, each step collecting premium, so effective exit = final strike + banked premium ($165 + $25 = $190) — the red line ends smoother and higher than buy-and-hold, and you don’t need to fully fix a position for a roll to be worth doing. Third, execution micro-rule: limit orders only on wide chains, never market orders — extends my §4 liquidity filter into order entry.

8. The risks, stated plainly

Risk	What it looks like	Mitigation
Asset goes down a lot	Persistent decline overwhelms the short-call income	Quality underlyings, indexes, 30% stop
Delta inversion	Sharp rally makes net delta negative; you lose while the stock rises	Long leg at 90–95 delta
Early assignment	Short is ITM with no extrinsic left	Roll at 80–90% extrinsic capture; never hold an ITM short into expiration with no extrinsic left
Dividend risk	Extrinsic < upcoming dividend → holders exercise to capture the dividend	Keep short extrinsic above the dividend amount
Wide bid-ask spreads	Slippage eats the weekly income	Liquidity filter; avoid leveraged ETFs
Whipsaw (the classic PMCC killer)	OTM short gets run over, you roll up, then price reverses and the long has no cushion	Being ITM from the start greatly reduces it — but see reverse whipsaw
Reverse whipsaw	Drop forces a roll-down to lower strikes, then a V-rebound caps you below the recovery	Accept as the mirror cost of the cushion; prefer rolling down for a credit over widening duration

On the whipsaw point: this is the specific failure that pushes practitioners from the standard PMCC to the in-the-money version. When your short is 30 delta and the market gaps through it, you buy it back at a loss, sell a higher strike, and then watch the whole thing reverse — now your long is far out of the money and you’ve collected almost nothing. Staying in the money means the short’s intrinsic loss is offset by the long’s intrinsic gain, so the reversal costs you very little.

Vega is a feature, not a bug

My book holds no short-premium trades, so its vega comes from this strategy alone: net long vega, because the LEAP’s vega outweighs the short weekly’s. A volatility spike lifts the long LEAP’s value, cushioning the book; a vol crush bleeds it — which is why the weekly short income has to out-earn LEAP decay, not just look positive in isolation.

Where it sits on a risk scale

My rating: 5 out of 10 for someone who understands intrinsic/extrinsic value, deltas, assignment mechanics and position sizing — and my prerequisite for trading it. For someone who doesn’t: 7–8. The strategy doesn’t remove risk — it reorganizes it into a more manageable shape. (One naming note: with a LEAP as the long leg, a broker’s risk system will classify this as a diagonal spread — same trade, different label on the ticket. “ITM covered call” is what it is economically; “diagonal” is what the margin system calls it.)

Cautions from the stock-based world [adopted and contrast]

• The holding-period clock [adopted — tax note, CPA verification]. On stock, an ITM covered call is a non-qualified covered call — while it is open, the underlying’s long-term holding-period clock is paused, so a covered-call trader should assume short-term gains. The LEAP version has its own clock problem: a short call held against a long position is a tax straddle, and the long’s holding period generally does not start while the offsetting short is open (an already-long-term position is the main exception). Verify with a CPA before counting on long-term treatment of anything in this structure.
• Assignment has tax consequences. Being called away can realize gains earlier than planned — factor your tax situation into the let-it-assign decision, not just the P&L.
• Don’t chase yield. Running this on high-dividend or high-premium names without checking fundamentals and business quality is the classic mistake — high income that comes with a deteriorating underlying is not income.
• Sell when volatility is high [contrast]. Some practitioners time entries for elevated volatility and fatter premiums; this playbook sells weekly on a mechanical schedule regardless. The difference is deliberate — do not bolt a volatility-timing filter onto the mechanical method without testing it as a separate variant (the §10 stay-in-T-bills rule is the one exception: sitting out for lack of qualifying premium is selection, not timing).

One tax-timing technique [open — for years when deferral matters]

With pennies of premium left on an ITM short and the stock above the strike, doing nothing into assignment is often right — profit is already max, shares go away Saturday, cash frees up Monday; rolling only makes sense if you want to keep the position. And the technique worth filing: rolling far out to defer assignment for tax timing — one practitioner rolled a trio of ITM calls to fall expirations specifically to avoid assignment (and the tax bill) this year, using the fat far-dated premiums of a liquid name. When assignment timing matters more than weekly income, duration is the tool.

Four tools from a veteran practitioner [adopted — language, metric, tool]

• Opportunity-cost breakeven [adopted — metric]. A $100 stock with a $110 short + $2 premium is better than stock everywhere except above $112 (strike + premium) — 125 means 13 points left on the table. I now price every short against its upside breakeven, not just its cushion.
• Speed bump, not crash barrier [adopted — language]. A standard call’s premium softens a fall ($100→$95 loses $300, not $500) but never hedges it; a true hedge needs a protective put. This is exactly what the ITM cushion upgrades — a taller speed bump, still not a wall. The persistent-downtrend row in my risk table stays.
• The 20/50 no-sell rule [contrast]. Sitting out fresh uptrends (the 20-day crossing above the 50-day) because new trends surge — selling only ~8–9 months of 12. That directly conflicts with mechanical weekly harvesting, so it stays a contrast: if my assigned shorts keep getting run over in trend surges, this is the first filter I’d trial.
• Diagonal-hedge defense [adopted — new tool]. Runaway short against you and unwilling to sell shares or buy back at a loss? Buy a longer-dated call at the same strike (short September 110 + long December 110) to turn the flat top vertical again — upside participation restored, hedge scalable if it profits, everything unwound at expiry with shares kept. This joins my §7 adjustment menu as the keep-the-shares defense.

Depth, checkpoints, and account placement [mixed]

Four points from the closest-philosophy school of stock-based ITM covers, plus a schedule:

• Don’t dig a hole in front of yourself. Be deep enough ITM that an ordinary decline can’t take you below the strike — accept slightly less weekly pay for a higher certainty of keeping it. Time is the element that matters; a hole dug by a gap has to be filled back in.
• Right stock → right market → right spot → squeeze the juice. An entry framework with one layer mine lacks: the market as tailwind behind the stock and the chart spot. Filed as a pre-entry checklist addition, not a replacement for §4.
• Assignment is max profit — just re-enter. Getting called away means the trade worked; put a similar position on the next day. And the accountant’s line cuts against my tax-timing technique on purpose: “there are worse things than paying taxes.” Both stay as an explicit tension — defer assignment when timing matters (the §8 technique above), otherwise treat assignment as payday, not failure.
• Layer across account types [open]. Running ITM covers combined with LEAPS across IRA, margin, and cash accounts for tax efficiency and capital rotation under different conditions. My playbook has nothing on account placement — [open] as a structural note (placement to decide, CPA input): same strategy, different tax wrappers for different jobs.
• The 7/3/1-day checkpoints. A roll-or-assign lifecycle managed on dated checkpoints (day 7, day 3, final day) rather than a continuous watch — the schedule the §4A monthly fallback borrows.

The tastylive reframe [mixed — framing adopted, parameters not]

Source: tastylive, “Stop Calling the Covered Call an Income Strategy. Here Is What It Really Does.” — https://www.youtube.com/watch?v=3Ky0piTV3CI. Stock-based OTM covered calls at 30–50 DTE — different structure, different tenor, and their parameters are not mine. Two things transfer, and one of them changes the operating language of this playbook.

The reframe [adopted — language, not math]: stop calling the harvest “income.” The central point: a covered call is not an income strategy — it’s a cost-basis-reduction transaction. The premium lowers the effective price paid for the stock: “the cost of your stock, the price you paid for the stock in net terms is lower, which means your risk is actually lower and the potential profit is a little bit higher,” and “where you place it is going to determine roughly what the max return is on the long stock.” Applied here: my weekly extrinsic is a basis reduction until the whole position nets positive — and whether it nets positive depends on what the LEAP’s extrinsic did the same week (the two legs’ time values move together; the harvest isn’t free money sitting beside a static LEAP). This is the rename my own corrections were reaching for: logging gross credits while the position nets less is the classic income-label failure — it’s why the ledger (§9, §13) tracks gross credits and whole-position net P&L as separate lines. The fix costs nothing and is now the operating language [adopted]: the ledger logs each week’s harvest as basis reduction — credit received, net of the round-trip costs, against the position’s net debit — and income is confirmed only at whole-position net P&L. Nothing new to compute; a label that can’t double-count.

The liquidity observation [mixed — corroborates Stage 1, adds a fallback]. In their example, the weekly options were the illiquid ones — “not particularly liquid and wide bid-ask spreads” — which is why they teach 30–50 DTE shorts instead. That corroborates two choices already in this playbook: the Stage-1 spread cap (round-trip ≤ 25% of weekly extrinsic) and the SPY/QQQ/GLD/SLV vehicle list, whose weeklies are among the only truly liquid ones. It also adds something the playbook lacked: a tenor fallback [open] — if Stage 1 rejects every weekly chain, sell a monthly (~30–50 DTE) ITM short against the same LEAP rather than forcing a weekly trade that fails the gate (wired into §4A Stage 1 and §10). Their 30–50 DTE range becomes the starting tenor for that fallback; the capture rhythm and carry-ratio math get re-derived for it, not copied.

What does not transfer [contrast]: the parameters. Their starting point — a call ~5% out of the money producing ~2% cost-basis reduction at 30–50 DTE — is calibrated for stock covered calls, not a 70-delta weekly ITM short against a LEAP. The underlying dial (premium collected vs. upside room surrendered) is the same slider §5 walks through; their numbers are not my numbers. And one genuine divergence worth naming: their frame is candid that the short strike caps the trade (“max return on the long stock”), while this playbook’s ITM depth pushes the same slider toward protection instead of appreciation — §2’s protection-vs-income slider already says this, from the opposite direction. Same tradeoff, different settings; no rule changes.

Not a trade recommendation, per the source — and none of this is either until the ledger says so. The reframe is language; the fallback is an [open] lead; the parameters are a contrast. The strategy itself is untouched.

9. Treat it like a business

“Most of the people that get killed out there are probably treating this as a hobby.”

The operational discipline is not optional [adopted]:

• Log every trade. Underlying, entry date, long strike/expiration, stock price, short strike, credit received, extrinsic collected, and every roll.
• Log the harvest as basis reduction [adopted — tastylive reframe, §8], not income. Each week’s credit, net of round-trip costs, reduces the position’s net debit; income is confirmed only at whole-position net P&L. Same numbers §9 already tracks — the label just stops the double-count before it happens.
• Journal the thesis. Why did you enter? What did you see? What would invalidate it?
• Track remaining extrinsic weekly. It’s the single number that tells you when to roll.
• Track expectancy, not win rate [adopted]. Log gross credits vs net P&L per trade; a 75% win rate means nothing without average win vs average loss — require running profit factor (gross profit ÷ gross loss) and expectancy per trade before any size-up.
• Respect the time cost. The “15 minutes a week” marketing is fiction. Checking extrinsic, rolling, and tracking a handful of positions is a daily habit.

Every loss is an expense of the business. What matters is that losses occur per plan, not by surprise.

Portfolio-level rules [proposed] (mine — starting values, under test)

• Correlated tech counts once — QQQ included. SPY, QQQ, NOW, AMD, ARM and similar share one bucket for caps (QQQ overlaps the single names heavily, so routing through the index doesn’t escape the bucket): a single sector/theme ≤ 30% of LEAP capital; total LEAP capital ≤ 50% of account value. Worked check on $100k account value: LEAP capital ≤ $50k; tech bucket ≤ $15k — e.g. 1 main QQQ $9k + 2 side tech $3k each fills it; non-tech then has room for e.g. 1 main GLD $9k + 1 side $3k; book total $27k ≤ $50k. If the bucket overflows, trim side positions first.
• Aggregate governors. Track total net delta and total short notional weekly; any single-week book loss over 5% of account value freezes new entries until ‘green’ two weeks running — green measured at entry or right after each roll, never midweek (the 80–90% harvest rule leaves little extrinsic late-week by design), and defined as: every open position’s short holds extrinsic ≥ 2× its round-trip trading cost, and no position has used more than half its stop distance (LEAP loss under 15% of LEAP cost). The monitoring bar is deliberately looser than the 25% Stage-1 entry check — strict at entry, tolerant in the book. One redundancy, noted: fresh off a roll the 2× extrinsic check passes trivially under the 25% check (4× coverage) — the half-stop condition is the one that can actually trip. Undefined dashboards can’t govern; this one now can.
• Market-wide drawdown rule [proposed] (starting version). SPY below its 200-day with lower weekly closes: no new side-position entries; main index positions held only inside their §6 stops; shorts keep rolling for income. The cushion earns its keep in chop, not in waterfalls.
• Trading costs in the math [adopted]. Every weekly roll costs two legs of slippage plus commissions on each position. Deduct measured round-trip cost from the short’s weekly extrinsic before judging a candidate (Stage 4) — a few dimes against a $363 harvest is several percent, and on thin-extrinsic weeks it decides pass/fail.

10. Quick reference card

Structure

• Long: 360 days (180 days–2 years), 90–95 delta call
• Short: ~7 days, ~70 delta call, at the expected move or support

Entry filters (abridged — full checklist in §§4–4A)

• Liquid options: weeklies exist, round-trip spread ≤25% of expected weekly extrinsic, no leveraged/inverse ETFs
• Quality: revenue/EPS growth, ROE, FCF (indexes/commodities exempt)
• Trend + pullback: above 50/200 DMA, 8 EMA > 21 EMA; pullback to 21 EMA/50 SMA or 50–61.8% fib
• Option economics: cushion ≥1 expected move, weekly extrinsic ≈1% of LEAP cost (starting value — scales with size; in low-IV regimes both checks may reject everything — that means stay in T-bills, a deliberate departure from always-on weekly selling)

Exits (decided before you ever roll)

• Exit at +50–100%, at 30–45 days left (unless the LEAP roll below applies), or at a 30% LEAP loss
• Roll the LEAP itself at ~90–120 days left while the thesis holds

Rolling (only if needed)

• Roll the short at 80–90% extrinsic captured
• Roll up on a pop (same expiration), down on a dip (for a credit)
• Never roll the long to defend a week
• Harvest = weekly basis reduction (credit net of costs vs. net debit); income confirmed only at whole-position net P&L [tastylive, §8]
• Weekly chains all fail the spread gate → monthly (~30–50 DTE) ITM short fallback [open], checkpoints instead of the weekday rhythm

Sizing

• Main positions: max loss 2–3% of account value → 30% stop ⇒ position ≈ 7–10% of account value
• Side positions: ~3% of account value each (≤4, ≤25% of LEAP capital) → full stop ≈ 1%
• Book: LEAP capital ≤50% of account value; one sector/theme ≤30%; >5% weekly book loss freezes entries until green 2 weeks (green = post-roll extrinsic ≥2× trading costs, no stop half-used)

Risk map (0–10)

• Informed and disciplined: 5
• Not fluent in options mechanics: 7–8

11. My takeaway, in one sentence

“You give up some upside participation for recurring income and downside protection.”

That’s my whole idea. The ITM covered call is not a way to beat the market — it’s my way to convert a market position into a weekly paycheck, with a cushion that lets me hold through the chop that shakes out most directional traders. The honest picture: you do not beat the underlying in dollars. You trail it in absolute dollars while matching its percentage on far less capital, with far less volatility and realized income instead of unrealized gain. The edge is in the entry, the discipline is in the roll, and the profit is in the extrinsic.

12. Sources

• tastylive — “Stop Calling the Covered Call an Income Strategy. Here Is What It Really Does.” — https://www.youtube.com/watch?v=3Ky0piTV3CI — the cost-basis reframe (§8; adopted as the playbook’s operating language: harvest logged as basis reduction, income confirmed at whole-position net P&L) and the weekly-liquidity observation behind the monthly-tenor fallback [open] (§4A). Their 30–50 DTE OTM parameters filed as [contrast].
• Born To Sell — “In The Money Covered Calls.” — https://www.borntosell.com/covered-call-blog/in-the-money-covered-calls — the canonical stock-based ITM covered call explainer: the 2%/month ≈ 24%/year yardstick (§3) and the own-it-at-the-net-debit rule adapted into Stage 2 [adopted].
• Investopedia — “Master Covered Calls: Income Generation Without Stock Ownership.” — https://www.investopedia.com/articles/optioninvestor/10/covered-call-no-stock.asp — the encyclopedia version of the stock-replacement trade (calendar spread): the OTM-short variant made concrete and the ratio idea, both filed as [contrast] (§2).
• The Blue Collar Investor — “LEAPS And Covered Call Writing.” — https://www.thebluecollarinvestor.com/leaps-and-covered-call-writing-2/ — the LEAPS-diagonal explainer: corroborates the diagonal-spread naming and broker-approval note, and supplies the assignment-by-construction design test, adapted into §2 [adopted — in corrected form: the literal test fails at entry on the QQQ numbers; the playbook version is the buy-shares near-neutral check]. Their stock-based verdict (plain covered calls are the better path for most) is the stock-vs-LEAPS tradeoff §7’s stock-based contrast case already carries.
• The Options Playbook — “Rolling a Covered Call.” — https://www.optionsplaybook.com/managing-positions/rolling-covered-calls — the rolling mechanics written out leg by leg: buy-to-close plus sell-to-open as a single spread order (§7 mechanics) and the compound-loss caution on repeated roll-ups (§7’s stock-based contrast case).

Educational content only. This is my working playbook — built from the long lineage of covered-call practice, with rules of my own on top. It is not financial advice. Options involve substantial risk of loss, including assignment and total loss of premium. Verify every structure against your own account, platform, and risk tolerance before trading.

13. My results ledger (empty on purpose)

No live trades yet. This section exists so the benchmarks have something to beat. One row per closed trade: underlying, dates, LEAP cost, gross credits, net P&L, the three benchmark lines (shares $/%, uncapped same-size LEAP, T-bills on idle cash), entry score (§4A), exit reason. Running profit factor and expectancy on top once N ≥ 10 closed weekly cycles — provisional only, and cycles on the same LEAP aren’t independent samples, so don’t read them as such; position-level outcomes (stops, targets, LEAP rolls) need a longer horizon or the Stage-3 backtest before they’re trusted.

Go-live checklist [proposed] — real size only after ALL of: ≥30 closed weekly paper cycles across ~3 months (≈3 concurrent paper positions spanning at least two uncorrelated underlyings, e.g. QQQ + GLD — 13 weeks × 3 ≈ 39; don’t shorten the window to fit fewer; starting paper capital = planned live account value, number written into §13 when the ledger opens) with every open paper position managed through at least one full short-cycle roll; profit factor ≥1.5 with positive expectancy net of estimated trading costs, both computed on whole-position net P&L (short income plus LEAP mark-to-market), not short-cycle income alone; max book drawdown ≤10% of starting paper capital (whole-position marks); beating T-bills net of trading costs with down-capture clearly below up-capture against shares (in down weeks you lose a smaller slice of the market’s fall than the slice of gains you keep in up weeks; raw-dollar beats fail in bull runs by design). The sample must include ≥4 down weeks (underlying down ≥1% for the week) or the window extends, and a position-level stress replay is required first on two named drawdowns — the 2025 tariff shock (Feb 19–Apr 7; SPY −21%, QQQ −26% peak-to-trough) and the 2022 summer–fall grind (Aug 16–Oct 13; SPY −19%, QQQ −24%) — using a VIX-based IV proxy instead of constant volatility, and labeled a rough check — the persistent-downtrend failure mode may never appear in three paper months. Paper can’t model slippage or assignment realistically, so the first live month stays at minimum size (one contract per position) regardless of the scorecard.

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