WMB Poor Man's Covered Call: Strike Selection, Premium & Risk
How to sell poor man's covered calls on Williams Companies — optimal strikes, expected premium, and the risks that actually matter for a large-cap energy name.
Is WMB a good poor man's covered call candidate?
WMB (Williams Companies) is a large-cap energy name with a low share price and good 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 WMB poor man's covered call
For a WMB 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 WMB.
Expected premium and income on WMB
Typical monthly premium collected on WMB 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 WMB is under $5,000 — the share price and the 100-share lot size set the minimum, not the strategy.
Risk management for WMB 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. WMB 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. Energy names track crude and natural gas prices closely — OPEC headlines and inventory prints drive intraday moves far more than company fundamentals most weeks.
WMB Poor Man's Covered Call FAQ
Can you run a poor man's covered call on WMB?
Yes. Buy a 0.80+ delta LEAPS on WMB 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 WMB poor man's covered call trades?
Use 30-45 DTE as a default for WMB. This is the classic theta sweet spot and works well on a stable ticker like this.
Is WMB suitable for beginners selling options?
Yes — it's a well-known, liquid name with established options markets, which is what beginners need. Always check the bid/ask spread before entering — anything wider than 5% of the mid price is a warning sign.
Related WMB strategies
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