Apple PMCC Review: How One LEAPS Position Returned 92% While the Stock Gained 37%

Introduction: Turning Apple into Your Personal Income Stream

Apple pays a dividend of roughly 0.4% per year. If you own 100 shares at $200, that's about $80 annually, barely enough for a nice dinner.

What if you could generate meaningful monthly income from Apple instead? Not by hoping the stock goes up, but by systematically collecting premium every few weeks?

That's exactly what the Poor Man's Covered Call (PMCC) does. It's a straightforward way to replace expensive shares with a long-term option, then sell shorter-term options against it for income. The result: higher cash flow, dramatically lower capital requirements, and the same upside exposure you'd get from owning the stock.

This isn't speculation. It's a mechanical income strategy that lets you generate your own dividend from stocks that don't pay one, or create a far better yield from those that do.

Let's walk through a real 2025 Apple position that returned roughly 92% in six months while the stock itself gained 37%. We'll show you exactly how it worked, why the math is so compelling, and how to implement it yourself.

What Is a "Poor Man's Covered Call"?

A Poor Man's Covered Call replaces shares with options. Instead of buying 100 shares and selling calls against them, you buy one deep-in-the-money LEAPS option and sell calls against that.

The mechanics are identical to a traditional covered call. The capital requirement is not.

Traditional Covered Call:

• Buy 100 shares: $20,000

• Sell 1 call against the shares

• Collect premium

Poor Man's Covered Call:

• Buy 1 deep ITM LEAPS: $5,500

• Sell 1 call against the LEAPS

• Collect the same premium

Same income stream. 73% less capital deployed.

Why LEAPS Work as a Stock Replacement

LEAPS (Long-Term Equity Anticipation Securities) are simply options that expire 1 to 3 years out. When you buy a LEAPS deep in-the-money, say, a $165 strike when the stock trades at $200, it behaves almost exactly like owning shares.

The key metric is delta. A deep ITM LEAPS typically has a delta around 0.75 to 0.85, meaning it moves $0.75 to $0.85 for every $1 the stock moves. That's 75 to 85% of the stock's price action with roughly 25 to 30% of the capital.

Once you own this "synthetic stock," you sell short-term calls against it, just like a regular covered call. The premium you collect becomes your income. Repeat this every month, and you've created your own dividend stream.

Why Use LEAPS Instead of Shares?

Dramatically Lower Capital Requirements

Buying 100 shares of Apple at $200 costs $20,000. In our example, the investor bought a January 2027 $165 strike LEAPS for $54.60 per share, $5,460 total.

That's $14,540 you don't have tied up in a single position.

This capital efficiency creates two massive advantages:

1. Higher Return on Capital

When you collect $200 selling a call:

• On $20,000 in stock: 1% return

• On $5,500 in LEAPS: 3.6% return

The exact same premium dollars become a dramatically higher percentage return on your deployed capital.

2. Freedom to Diversify

Instead of $20,000 locked in one Apple position, you could run:

• Apple PMCC: $5,500

• Microsoft PMCC: $5,500

• Amazon PMCC: $5,500

• Cash reserve: $3,500

Four distinct income streams. Three different companies. Built-in diversification. All with capital that previously funded a single stock position.

The Math in Practice: Real Numbers

By December 2025, Apple had rallied from $200 to $274, a 37% gain in six months.

Stock-Only Results:

• Investment: $19,993

• Gain: $7,468

• Return: 37.35%

PMCC Results:

• Investment: $5,460

• Gain: $5,000

• Return: 92%

The PMCC investor made roughly 2.5x the return on capital, while freeing up $14,540 for other opportunities.

Even better: that $14,540 could fund three more PMCC positions. If each generated similar returns, the total profit would far exceed what the stock-only approach delivered.

Case Study: The Apple PMCC in Action

Let's walk through exactly how this position worked over six months.

Position Setup (June 26, 2025)

Stock Price: $199.93

Long Position:

• Bought: 1 Jan 2027 $165 LEAPS call

• Cost: $54.60 per share ($5,460 total)

• Delta: 0.80 (approximately 80 shares of exposure)

This LEAPS had roughly $35 of intrinsic value (stock at $200 vs. $165 strike). The rest was time value. High delta meant it would move almost dollar-for-dollar with Apple.

Income Generation: Selling Short Calls

Over the next six months, the investor sold a series of out-of-the-money calls, creating a steady income stream:

June 26: Sold Aug 15 $215 call → $300 premium
August 6: Sold Sept 19 $225 call → $360 premium
August 8: Rolled to $235 call → $555 premium
September 3: Sold Oct 17 $245 call → $420 premium
September 24: Rolled to Nov 21 $260 call → $705 premium
October 21: Sold Nov 21 $275 call → $430 premium
November 7: Sold Dec 19 $280 call → $400 premium
December 16: Sold Jan 16 $280 call → $330 premium

Each sale generated immediate cash. Some expired worthless (ideal outcome). Others required buying back and rolling to higher strikes as Apple rallied.

This is the trade-off in any covered call strategy: you cap some upside in exchange for consistent income.

Final Results

By mid-December 2025:

Stock Performance: $199.93 → $274.61 (+37%)

LEAPS Value: $54.60 → $117.35 (+115% on the LEAPS itself)

Net Position Return: 92% after accounting for all short call management

The PMCC significantly outperformed on a return-per-dollar basis, despite giving up some upside through the short calls.

How to Implement a PMCC Strategy

The Poor Man's Covered Call is straightforward once you understand the components.

Step 1: Buy a Deep ITM LEAPS

Choose your stock: Pick a quality company you're bullish on long-term with liquid options.

Select the strike: Go deep in-the-money, typically 15 to 20% below the current stock price. This ensures high delta (0.75 to 0.85) and mostly intrinsic value.

Pick the expiration: 12 to 24 months out gives you plenty of time to harvest premium.

Example: Apple at $200, buy the $165 strike LEAPS expiring in January 2027.

What to look for:

• High delta (0.75 to 0.85)

• Mostly intrinsic value (minimal time premium)

• Tight bid-ask spreads

• Good open interest and volume

Step 2: Sell a Short-Term OTM Call

Choose the strike: Select an out-of-the-money strike, typically with 0.20 to 0.30 delta (roughly 20 to 30% probability of finishing ITM).

Pick the timeframe: 4 to 8 weeks to expiration is ideal, long enough to collect meaningful premium, short enough that you're not tying up the position too long.

Example: If Apple is at $200, sell the $210 or $215 call expiring in 30 to 45 days.

You've now created a diagonal spread: long a far-dated ITM call, short a near-dated OTM call. This is your covered call using options instead of shares.

Step 3: Manage the Position

Your short call will do one of three things:

Expires Worthless (Best Case): The stock stays below your strike. You keep the entire premium. Sell another call for next month. Repeat.

Approaches Your Strike: If the stock rises near your short strike, you typically roll the call, buy it back and sell a new one at a higher strike and/or later date. This lets the position continue capturing upside.

Stock Drops: Your short call expires worthless (you keep premium). Your LEAPS loses value, but far less than shares would have, and the premium provides cushion. Decide whether to continue or exit based on your outlook.

Step 4: Repeat the Cycle

Each time your short call expires or is closed, sell another one. You're creating a mechanical, repeatable income stream, like collecting a monthly dividend from your position.

Over time, these premiums chip away at your LEAPS cost. Eventually, you may collect enough income to fully offset what you paid for the LEAPS. Everything after that is pure profit.

Benefits of the PMCC Strategy

Capital Efficiency

Deploy 25 to 35% of the capital required for shares, get 75 to 85% of the price movement, collect the same income.

Higher Yield on Capital

The same premium dollars represent a much higher percentage return on your smaller investment. This compounds powerfully over time.

Consistent Income

Create your own dividend stream from stocks that don't pay one, or dramatically enhance the yield of those that do. Apple's 0.4% dividend becomes irrelevant when you're generating several percent per month through premiums.

Upside Participation

Your high-delta LEAPS captures most of the stock's gains. While your short calls cap the maximum, proper management (rolling strikes higher) lets you participate in sustained uptrends.

Cost Basis Reduction

Every premium collected lowers your net cost. If you collected $15 in total premiums on a $54.60 LEAPS, your effective cost drops to $39.60. This cushion protects against flat or slightly down markets.

Diversification

Because each position requires so much less capital, you can run multiple PMCCs simultaneously, spreading risk across different stocks and sectors rather than concentrating everything in one position.

Limited Risk

Your maximum loss is the LEAPS premium (plus any net debit from managing calls). Significantly less than the full stock loss if the position goes against you.

Lower Volatility

Deep ITM options are less sensitive to volatility changes and have slower time decay than shares. Your position is more stable, and the short calls you sell benefit from decay, creating positive theta.

Risks and How to Manage Them

Assignment Risk

If your short call goes deep in-the-money, it might get assigned (especially near ex-dividend dates). You'd be short 100 shares, but your LEAPS provides immediate coverage, you can exercise it to deliver shares.

Management: Roll your short calls before they get too deep ITM. Monitor positions around dividend dates. With proper attention, assignment is rarely an issue.

Capped Upside

You limit maximum profit to your strike price plus premium. If the stock explodes higher, a pure long position would make more.

Reality Check: You're still making excellent returns on far less capital. The income provides downside cushion. It's a trade-off, not a flaw.

Time Decay and Volatility

Your LEAPS slowly loses time value. Volatility changes affect both your long and short positions.

Management: The short calls offset most of this. Choose deep ITM LEAPS to minimize sensitivity. Initiate positions when volatility is reasonable.

Liquidity

Some LEAPS have wide bid-ask spreads. Stick to highly liquid underlyings like Apple, Microsoft, Amazon, stocks with tight markets and active options trading.

Complexity

This isn't buy-and-hold. You'll monitor positions weekly and roll calls as needed. It requires attention but isn't complicated, most find it routine after 1 to 2 cycles.

Over-Leverage Temptation

Because PMCCs are so cheap, you might be tempted to run too many positions. Don't. Use the capital efficiency to diversify intelligently or reduce total risk, not to gamble more aggressively.

Who Should Use This Strategy

The Poor Man's Covered Call works particularly well for:

Income-Focused Investors: Create consistent cash flow from growth stocks that don't pay dividends, or dramatically enhance yield from dividend payers.

Smaller Accounts: Access expensive, high-quality stocks without tying up $20,000 to $50,000 per position.

Portfolio Diversification: Run multiple positions across different sectors with capital that would normally fund 1 to 2 stock positions.

Conservative Traders: Prefer defined risk and systematic approaches over speculation.

Long-Term Bullish Outlook: You believe quality companies will rise over time but value income along the way.

Final Thoughts

The Poor Man's Covered Call using LEAPS turns a covered call strategy into something dramatically more powerful, not by changing the mechanics, but by changing the capital requirements.

Same income potential. 70% less capital deployed. Higher returns on what you invest. Freedom to diversify.

The 2025 Apple example demonstrated this clearly: 92% return versus 37% for the stock, using roughly one-quarter the capital. This isn't luck or perfect timing. It's the mathematics of options leverage applied systematically.

For investors seeking income, especially from stocks that don't pay meaningful dividends, the PMCC creates a repeatable, mechanical way to generate cash flow. You're not speculating on explosive moves or hoping for dividend increases. You're harvesting premium every month, letting probabilities work in your favor, and compounding small, consistent gains.

Start with one position. Learn the rhythm of rolling calls and managing the LEAPS. You'll quickly discover why this approach has become core to many income portfolios.

It's not about working harder or taking bigger risks. It's about using capital more efficiently, making your money work harder so you don't have to.

Probabilities over predictions,

Andy Crowder

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Disclaimer: This is educational content only. Not investment, tax, or legal advice. Options involve risk and aren't suitable for all investors. Examples are illustrative. Real results will vary. Talk to professionals before you risk real money.