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akroma

Poor man's covered call

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Hi All,

I have been looking into and placing some poor man's covered calls and would like to know your opinions on potential strategies as well as the general idea of trading poor man's covered calls. What are the advantages, what are the disadvantages and pitfalls and are they a viable long term way of trading? 

Regards, Akroma

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So I currently have a long call with a strike of 25 in FL. I wrote a call against it with a 44 strike which expires tomorrow. It looks like this will get exercised. I have no current cash position in my account. What would happen tomorrow if I do not have enough margin to be short 100 shares of FL due to the exercise of the 44 call? I do have the long call which could cover it, but would that help since I don't have the money in the account to exercise my long call?

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I believe they will exercise your long calls automatically, but it's worth to ask the broker.

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