I have a few questions For PMCC

PMCC = which you are Buying a LONG deep ITM Call with around 180 DTE. Then selling a SHORT OTM Call with DTE <60 or whichever DTE you feel good about it.

Let's take AMD for example,  Reference: AMD inc Yahoo Options Chart
- Buy Long Calls with the strike price $90 expiry on 16-December with the premium of $26.16.
- Sell Short Calls against it with the strike price of $120 expiry on 19-August with the premium of $5.75.

Questions:-
1) The total amount that I need to pay for the Buying the Long Call is $2616. Can i assume the breakeven price for this options excluded the Selling Calls is $116.16? (26.16+90.00). Meaning if AMD rises above $130, I'll be making profit if i exercised the call options anytime before Expiry and sell it immediately? (Provided i have the upfront cash to buy the entire share at $9000)

2) After i sell the calls for $575, my total cost for this PMCC is $2051. Next is to wait till 19-August, if it expired worthless then only i can sell another calls?
2a) What if the Short Call got exercised? Since I'm using IBKR, does the initial Long Call exercised automatically? or IBKR will treated as "Naked Calls" and ask me to cough out 100 AMD shares?
2b) If the short call got exercised, how much did i lost in total?

3) If i don't have enough cash to exercise the long call (buying the 100 shares before the long call expired), I'll have to sell a short calls to ensure it got called away before the expiry date?

Still a toddler here

Answering from my phone, so not gonna format my answers

Questions:-
1) The total amount that I need to pay for the Buying the Long Call is $2616. Can i assume the breakeven price for this options excluded the Selling Calls is $116.16? (26.16+90.00). Meaning if AMD rises above $130, I'll be making profit if i exercised the call options anytime before Expiry and sell it immediately? (Provided i have the upfront cash to buy the entire share at $9000)
just sell back the option. You'll forfeit timevalue if you convert to shares before expiry
boss... time value has been lost regardless no?... going to shares eliminate decay since not holding anymore...
but op... in this instance just sell to close, no reason to pay double fees converting to shares and selling it...

2) After i sell the calls for $575, my total cost for this PMCC is $2051. Next is to wait till 19-August, if it expired worthless then only i can sell another calls?
can rollover to further dates
boss... i think he's asking if he must wait for his first sto call to expire worthless before selling another...
op... you can buy to close before expiry and then sell another... should not sell another as naked call if you don't know what you are doing, as your existing long call is insufficient to cover both, and beyond some point you will lose your shirt...

2a) What if the Short Call got exercised? Since I'm using IBKR, does the initial Long Call exercised automatically? or IBKR will treated as "Naked Calls" and ask me to cough out 100 AMD shares?
your long call still has time value, I hope ibkr converts to a $120 short position. Your call will now become a synthetic put
dunno...most likely ibkr will liquidate the long call if don't have enough funds in account... they wont convert/open another position that will subject op to new risks... should be well documented by ibkr help/education/somewhere

2b) If the short call got exercised, how much did i lost in total?
if it's now a synthetic put, then there's max loss and unlimited gain,  well until stock reaches $0
op... at 130 strike at expiry... your short call lost 440... but your long call gain 1400... overall position is 1200 gain, factoring in all the premiums i think...

3) If i don't have enough cash to exercise the long call (buying the 100 shares before the long call expired), I'll have to sell a short calls to ensure it got called away before the expiry date?
can always rollover

Still a toddler here

Still taking baby steps at a time, always felt like just touching the surface of it... wondering why it's so hard for me to understand PMCC...
you skipped many baby steps that's why... bull call diagonal debit spread (pmcc) is an intermediate strategy...

After i posted my previous, i go ahead and watch couple more of videos explaining on PMCC, and you probably guessed it right ~ i still have few underlying question that I wonder why most video don't talk about it. Firstly, I found that PMCC is just a term for a variant of Diagonal Spread or to be specified Calendar Spread  (I'm dumbass). I also realized that buying the Long Call doesn't mean you own the 100 shares of the stock, you just own the "Options" so when something happen with your Short Calls falls ITM and got assigned, the brokerage will do the stupid right thing and liquidate any asset that you're holding except the Long Call Options, as most brokerage did not see the option as your "Asset".
usually you open the two legs as a pair, so the long call will get closed to cover the short call... if you didn't open as a pair, then they usually take cash first before liquidating other positions...

So then, most videos discuss the Pros and Cons about using PMCC where the maximum risk only the amount of the money you paid for the premium on the initial Long Call + any subsequent premium if you roll or close your Short Call options at a loss.  I wonder why none of the video that i watched mention about what to do with the Initial Long Call position? Is it i missing something here?

From my understanding, if you "Buy" to open a Call position and didn't do anything about it, the "Buy" option will reach it expiry date and expired worthless.
it will expire itm/atm/otm... otm is worthless, itm/atm you must decide what to do, sell it away or take assignment, if do nothing its gone but this depends on broker...

And from those video i watched, I don't see how you can continue to sell a short call until it can cover the entire premium for the initial long call and still make a profit from it.
your long call has value if done correctly, profit from long call + premiums collected from short calls

So in the end i still have to cough out $9000 to fulfil the Long buy Option at expiry? (i really thing i missing something here, hope anyone can pointed it out)

p/s: Pretty sure all the sifu out there are planning to gang me on this...  :
nobody gang you yet... so far see ppl trying to help only...

Someone mentioned IBKR can't trade PMCC without Margin. But Robinhood only applicable for US sad

Kindly check your pm. I send you a link to a telegram group full of people who does options.

Like I said just so many times. Just apply for margin. You don't need to use it. As long as your cash is positive, you will never be charged any interest for it for IBKR.

Just YouTube search poor man covered calls, pretty much all don't tell you how to close the long call. Most only cover if you only sell 1 call. It's like briefly explain what's a PMCC is.

Hmm I wonder how he's holding up ... That video is taken last year November... But option does have the potential to get really high reward/year... Provided you're right every time. But I still not sure how Diagonal Spread in actual trading. Will check on the paper trading account. And maybe use his method of 3-4 months DTE but I'll go with 2 months just to have a taste of closing the long leg

watched the video and i'm dying to know how his trade turned out. he bought a call @ $220 with Feb 18 2022 expiry. SQ is @ $97.70 on that day

At that point of time they didn't expect the market to go down so much. Like right now, we also unsure if we already hit the bottom of the market.

Let say Square now which is trading at $78, If were to buy LEAPs Deep-in-the-money Strike $60 expiry 2024. If suddenly Square goes back up to $150 in a year time (which may or may not happen) then The leap option will profit around (the picture below)



Actually how to see this chart, the one my cursor on shows $5946 (176%) meaning the LEAP can be sold at around $5946? which is 76% profit after minus the expenses?

Hmm, anyone ever Roll option but ended up rolling to wrong date? I was so "Tempted" to roll my CC Upward, but ended up Rolling Upward + 14days away (I didn't realize IBKR automatically choose 2 weeks later when rolling option).

Intended to roll upward and close in the money for extra $$. Myself to blame when i confirm without checking the date.

I bought PLTR at $8.5, and sell it at $8.5 ITM for $0.61 Premium expiry on 1st July. 
Then I roll upward to $9 intend to get another $~20 premium, but I ended up roll the option to Strike Price $9, but expiry on 15th July with a debit of $16/contract.

That's the difference between the initial option $8.50 (Buy to close) and the new Option $9.00 (Sell to open). 

Nope, it took me two months to recover $400 that i lost on my 1st option trading.    but i only have a capital of $4k so it's more on trial and error... Don't even think about earning $100 per week, it maybe possible with higher capital, but as of now. I'm aiming $10/contract/week now. Just to be on safer side before a market crashed. I'm playing wheels, just selling Puts then selling calls and repeat. Have not try buying a Put/Call (other than buy to close)

I wished i have this kind of US when writing Options, which platform is this?

By the way, for your Options. Do you need to close or just wait for all of it to be expired?

From the video. He mentioned that Bear Put Spreads > Naked Puts. Where he explained that Spreads has more advantage ( Lesser cost, less impact from IV crush, and less impact from Time Decay) while you lose your maximum profit (Max Profit got capped). I see how he use Option Strat to estimate what is the max profit he can made using Spreads.

But since you're not owning a 100 shares nor you have enough $$ to buy 100 shares (Naked Puts), I wonder if IBKR will recognize this type of "synthetic spreads"? And usually for spreads, you need to close both legs before expiry? 

Want to ask all professional here, I've found some stocks which is high I.V. around 300%-400% but strike price in very low price below $10, I only here to sellput option to gain premium as passive income, regardless after a month the stock up or down, it will exercised or expiry, if exercised I might sell the stocks, is it a good way to go like this ? and I plan to do it in every month.

Just stumbled onto this option trading page. I just started options trading. A newbie. Ramjade, thanks for the invaluable advice you gave here. For the time being, I will do what you do, i.e. just sell call and put options. Maybe when I get better and more sophisticated, I look at buying and use those option strategies I read so often. 1 more thing that troubles me about option trading; the spread is quite wide. Also, I always join the queue at the bid or spread price (depends on whether I m selling calls or put). Is that advisable? Next week, I shall sell a put option on IBIT. With that, I get to trade crypto currency using options.