VZ Poor Man's Covered Call: Strike Selection, Premium & Risk
How to sell poor man's covered calls on Verizon Communications — optimal strikes, expected premium, and the risks that actually matter for a large-cap communication name.
Is VZ a good poor man's covered call candidate?
VZ (Verizon Communications) is a large-cap communication name with a low share price and excellent options liquidity. Implied volatility is low, so premiums are modest. Traders use this name when they want stability and a low probability of assignment rather than maximum yield. It also pays a dividend, which adds a second income stream on top of the premium you collect.
Strike selection for a VZ poor man's covered call
For a VZ PMCC, buy a long-dated call with 0.80+ delta (typically 12-18 months out) as your synthetic long, then sell short-dated calls 3-5% above the stock price at 0.25-0.35 delta. The LEAPS tie up roughly 30-50% of the capital of buying 100 shares, which is especially valuable on a low share price ticker like VZ.
Expected premium and income on VZ
Typical monthly premium collected on VZ runs around 0.5-1.0% of capital, which annualizes to roughly 6-12% if you sell new contracts every cycle. Capital required to run a single contract wheel on VZ is under $5,000 — the share price and the 100-share lot size set the minimum, not the strategy.
Reference Trade
Example Covered Call on VZ
- Strike: $45 (5% OTM)
- Expiration: 30 days
- Premium: $0.70 per share
- Return if flat: 1.6% ($70)
- Return if called: 6.6% ($290) + dividend
- Probability keep shares: 74% keep shares
Risk management for VZ poor man's covered call trades
PMCC risk is concentrated at the LEAPS expiration: if the stock collapses, the long-dated call can lose significant value quickly. You also have to manage the short call not going deep in the money against you before your LEAPS appreciates equivalently. VZ is a low-volatility name — the main risk is not sudden moves but slow grinds against you, which hurt covered-call writers who picked strikes too close to the money. Communication stocks are a mix of traditional media (ad spend cycles) and internet platforms (user growth); earnings moves tend to be outsized.
VZ Poor Man's Covered Call FAQ
Can you run a poor man's covered call on VZ?
Yes. Buy a 0.80+ delta LEAPS on VZ dated 12-18 months out as your synthetic long, then sell short-dated calls 3-5% above the stock at 0.25-0.35 delta. Capital tied up drops from under $5,000 to roughly 30-50% of that — a meaningful improvement when the share price is a low share price.
What expiration should I use for VZ poor man's covered call trades?
Use 30-45 DTE as a default for VZ. This is the classic theta sweet spot and works well on a stable ticker like this.
Is VZ suitable for beginners selling options?
Yes — it's a well-known, liquid name with established options markets, which is what beginners need.
Related VZ strategies
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