Poor Man's Covered Call vs traditional long stock portfolio

ITM_Latino said:
Still scratching my head on how the Syn straddle performs better than outright shorting the natural at 60D, but coming from you guys I don't have the slightest doubt it does!
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It allows you to overwrite. There is zero advantage in shorting the natural.
 
destriero said:
It allows you to overwrite. There is zero advantage in shorting the natural.
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In all ways the synth is better. Microstructure (no ITM), OWs, reduce/increase size on equity signals. Ability to alter the position w/o taking short-term gain treatment. Shares take a shit and you close a portion of the underlying in 2021 against a 2022 vol-position.
 
morganpbrown said:
OK, so humor me here, and I will be testing your humor before you just say screw it!

I have a PMCC on SPY.
LEAP: 12/17 exp, 420 call, price=$34.31 - vega of 0.7
short: 10/15 exp, 448 call, price=$5.87 - vega of 0.5

If vol rises, then doesn't my LEAP increase more in value than the short? Isn't this an angle in my favor?

And as the delta of the LEAP approaches 50, the LEAP will have more extrinsic value for me to sell if I decide to roll it.

You are right - when the market moves against you, you need to roll the short early and often. And sometimes you can't roll fast enough to avoid big losses (see my GLD experience above). But from what I've seen, the loss is cushioned relative to simply holding the equivalent delta in long shares.
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Mark went from 28.44 to 26.97.
 
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