I understand the concept of the compound option. However, I can not really get why it would beneficial compared to a plain vanilla option. I watched videos and read books on it. I heard it offers more leverage. In the compound option, you own an option on an option. Now the payoff/ risk profile confuses me. Example: SPY is currently at 350. I buy a compound call on a call option with the first option expiration in 6 months and the second expiration in a year's time. Assume the first cost 2usd and the second 3usd. Now my question is: If I instead buy a 6 months plain vanilla option would it cost more or less than the 2Usd of the first compound option? Now the second question: Let's ignore the second expiration compound option above and the exercise process and all that. Imagine SPY goes from 350 to 375 and I bought plain vanilla call for 2usd also valid for 6 months. I know I would make a profit of 2300 USD after subtracting the premium cost. but would I make the same profit on the first expiration compound option assuming the same premium cost?