Picture Archimedes, sometime around 250 BC, standing on the shoreline of Siracusa.
He’s not a large man. He’s not particularly strong. But he’s just made an extremely bold claim that stops people mid-conversation: give him a lever long enough and a fulcrum to place it on, and he could move the Earth itself.
Not with more muscle. Not with more effort. With better structure.
The fine folk of Siracusa no doubt laughed. Engineers rarely get the last laugh in their own lifetime, but the principle he was describing has quietly underpinned every meaningful advance in mechanics, architecture, and even capital markets, ever since.
Leverage isn’t about force. It’s about physics. It’s about arranging things so that modest input produces outsized output — not by taking on more risk, not by borrowing against tomorrow, but by finding the fulcrum that changes what’s possible with what you already have.
That’s the idea I want to introduce today. And I want to introduce it through a strategy that most investors never encounter — not because it’s obscure or complicated, but because it sits quietly in the options world, while most people are busy staring at price charts and macro forecasts.
It’s called the Poor Man’s Covered Call (PMCC)
The name is unfortunate. The returns are not.
First, The Machine It Improves On
To appreciate improvement you need to understand the original.
A covered call is one of the most straightforward income strategies in markets. You buy 100 shares of a company. You sell someone else the right to buy those shares from you at a higher price (a call option) and they pay you a premium for that right. If the stock never reaches that price by expiry, the option dies worthless, you keep the premium, and you do it again next week/month/year etc. If the stock does get called away, you sell at a price you agreed to in advance which is still profitable, just capped.
Simple and effective when done right.
However, the main drawback of the covered call is that it can require a lot of working capital, especially for many of the assets that I know and love.
Consider that running a covered call on CME Group right now with the stock sitting at $303 means owning 100 shares at $303 each. So over $30,000, locked in a single position producing perhaps $300–400 a month in premium income.
*The 30 day ATM call on CME is $3.53 mid-bid/ask at time of writing
That’s decent yield. But it’s being extracted from an enormous base, with $30,000 stuck and working at roughly 1% per month. And given CME pays only a modest dividend of ~3.5% the returns from yield alone might not be worth the management time.
For decades the covered call was the tool of choice for many (it still is).
Then options markets matured. And someone with an eye for leverage found the fulcrum.
The Lever
Here’s the insight at the heart of the PMCC, stated plainly:
A deep in-the-money call option with a long expiry behaves almost identically to owning the shares — at a fraction of the cost.
When I buy a deep in-the-money call option with a long expiry, it behaves almost identically to owning the shares but I’m spending a fraction of the cost.
When I position a call option deep enough in the money, it moves nearly dollar-for-dollar with the underlying stock. It tracks price closely because there’s less extrinsic, or time value in it. It carries the same directional exposure and — this is the critical part — I can sell short-dated calls against it, exactly as I would if I held the shares outright.
So instead of spending $30,000 on 100 shares, I spend a fraction of that on a LEAP (Long-term Equity Anticipation Security), essentially a long-dated call option, and use that as my foundation. Then each cycle, I sell a short-dated call against it, collecting the premium or selling for capital gains in the event of assignment and repeat.
The structure I use, distilled:
I buy a deep in-the-money call expiring 12–24 months out. This becomes my synthetic stock position — my lever.
I sell a short-dated out-of-the-money call against it each cycle. This is my rent.
Collect. Reset. Repeat.
No borrowed money. No margin calls. My maximum possible loss is defined the moment I enter being the price I paid for the long call. What I’ve built is a replacement for share ownership using pure structure, with my capital requirement slashed and the fulcrum placed exactly where Archimedes would have wanted it.
The Trades — Real Positions.
This is where it stops being theory.
What follows are some live positions from my own portfolio. Trades I’m actively running and sharing with Machina Capitalis premium members each cycle. The numbers aren’t hypothetical. They’re what the machine is actually producing right now.
CME Group — The Aggressive Configuration
CME is a business I understand and respect: it earns revenue every time a derivative contract changes hands, regardless of market direction. When volatility rises, its income rises. It’s a toll road on financial uncertainty which makes it an excellent foundation for a systematic income strategy IMHO.
The stock is trading at $303 and I have just notified premium members of the trade I entered:
Long: January 2027 $200 call = $10,340
Short: FEB 27 2026 $305 call ~$310 premium collected
Total capital deployed: $10,340 Compared to the $30,300 the share-based equivalent demands today.
The short call sits roughly 9% above the current price (out of the money), giving the stock room to move while the premium lands in the account.
If the short call expires worthless, $310 is collected. That’s 3.0% return on capital in a single week.
The long call remains intact. The position resets. The machine runs again next month.
If CME rallies through $305 and assignment occurs, the spread closesAt expiry, a CME close at or above $305 implies a capped payoff of roughly $1,150 before costs, based on the structure’s defined spread.
Personally I love using this setup.
Estimated returns shown are payoff-diagram projections based on specific expiry assumptions; actual results will vary materially depending on price path, volatility, timing of exit, and execution.
ICE — The Patient Rent Engine
Intercontinental Exchange is trading at $154 today. Yesterday I entered the following trade:
Long: January 2027 $125 call ~$3,710
Short: March 20 2026 $160 call ~$181 premium collected
The short call sits approximately 7% above the current price. The wide gap between the long and short strikes makes assignment unlikely by design. This isn’t a position built to close, it’s built to run. To collect rent on a long-dated asset while that asset quietly compounds in the background.
The result so far: $181 collected, approximately 4.9% return on capital over a 60-day cycle.
Long call intact. Next short sold in April if the March contract expires worthless.
What These Numbers Suggest
A brief pause is warranted here, because these figures deserve honest framing.
Annualized returns of the likes above are not a promise. No strategy produces clockwork results across every market condition, and anyone presenting options income as guaranteed yield is someone to walk away from. The numbers are shown purely to illustrate the capital efficiency of one tactic vs the other.
The traditional CME covered call locks up $30,300 today. This PMCC locks up $10,340. That $20,000 difference doesn’t disappear it remains available, if I so choose, for more trades or investment positions.
Over time, systematic reallocation and repeatable income collection can materially influence results, particularly when applied consistently across multiple market cycles. This approach depends less on prediction and more on structure, patience, and disciplined execution.
A Final Thought
Archimedes never actually moved the Earth. But he understood something that most people in his time didn’t: that the question was never about strength. It was always about position. Find the right fulcrum, apply the lever correctly, and physics does the rest.
That’s what Machina Capitalis is built around. Not predictions. Not hot tips. Not the exhausting performance of appearing to know what markets will do next week.
My machine designed carefully and run consistently, emphasising structured income processes and disciplined execution over market prediction.
The two positions above are live as of February 20th, 2026. The premium members who follow these trades saw the setups before the trades were placed: from the entry logic, the strike selection to the management plan, and the exit criteria. Every cycle, they see the next ones.
The two positions above were live as of February 20th, 2026, with premium members able to follow the full decision process in advance — from structure selection through to management and exit planning.
If this framework has prompted you to consider how repeatable option structures can influence income and capital allocation over time, that line of inquiry is worth exploring to see whether it may be appropriate for you.
The lever exists. The fulcrum is here.
The premium tier is where we place it together.
Disclaimer: This article is provided for general information and educational purposes only and does not constitute financial advice. Options involve risk and may not be suitable for all investors. Examples shown are from a real portfolio and are not recommendations. Readers should consider their own circumstances and conduct independent research before making any investment decisions.
