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Using deep ITM call options instead of buying stock outright.
Why It Matters
Stock replacement lets you control shares for a fraction of the cost. Instead of $50,000 for 100 shares of a $500 stock, buy a deep ITM LEAPS call for $10,000-$15,000. You get similar upside with 70-80% less capital tied up - freeing money for diversification or other opportunities.
Key Points
- Use deep ITM calls (delta > 0.80) to mimic stock ownership
- LEAPS (1-2 year expiration) minimize time decay impact
- Downside: no dividends, position expires, still has some time decay
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When to Use Options
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Common Questions
Using deep ITM call options instead of buying stock outright. Stock replacement lets you control shares for a fraction of the cost. Instead of $50,000 for 100 shares of a $500 stock, buy a deep ITM LEAPS call for $10,000-$15,000.
Stock replacement lets you control shares for a fraction of the cost. Instead of $50,000 for 100 shares of a $500 stock, buy a deep ITM LEAPS call for $10,000-$15,000. You get similar upside with 70-80% less capital tied up - freeing money for diversification or other opportunities.
Use deep ITM calls (delta > 0.80) to mimic stock ownership
LEAPS (1-2 year expiration) minimize time decay impact
Downside: no dividends, position expires, still has some time decay