This video explains the impact of breakeven with covered call trades, states Alan Ellman of The Blue Collar Investor.
A viewer writes, “I have a question regarding the setup of the PMCC following your strategy. Based upon your entry conditions, I find it very hard to find a setup that works unless I go very deep ITM to the .94-.97 Delta range when selecting my LEAPS. For example, with International Business Machines Corporation (IBM), using the $120 LEAPS with a .75 Delta note that breakeven exceeds the current stock price. Would you go so far as ITM for the LEAPS? How would you set up this trade?”
Learn more about Alan Ellman on the Blue Collar Investor Website.