You’re buying intrinsic value and slower theta decay. It isn’t what I would do, but that’s the general idea.
No-Error6436 on
Buying a deep ITM call is a great way of creating a synthetic long position that is capital efficient
Premium for this call is 5k, and much cheaper than paying $140 x 100 for a full lot. The current delta is 81, which is essentially like having the same price exposure of 81 shares.
bozoputer on
To set up a poor man’s covered call (PMCC). You can sell OTM cc’s on this position for about 7 months.
3 Comments
You’re buying intrinsic value and slower theta decay. It isn’t what I would do, but that’s the general idea.
Buying a deep ITM call is a great way of creating a synthetic long position that is capital efficient
Premium for this call is 5k, and much cheaper than paying $140 x 100 for a full lot. The current delta is 81, which is essentially like having the same price exposure of 81 shares.
To set up a poor man’s covered call (PMCC). You can sell OTM cc’s on this position for about 7 months.