Part 4/8:
While a Poor Man’s Covered Call allows traders to leverage smaller amounts of capital, this strategy inherently carries more risk than outright stock ownership. The longer a call option is held, the more time it has to lose value, specifically through a phenomenon known as 'theta decay'. Unlike a traditional shareholding situation, this strategy necessitates that the underlying stock appreciates steadily throughout the life of the option in order for a trader to break even.