Let's say stock price is at $3 and I want to buy some Call options with strike say 3x the current stock price and maturity as long as possible (ie. 2+ years, LEAPS etc.), but the broker does not have this strike available. What to do to get such options?
You could try this: http://www.cboe.com/aboutcboe/new-strike-price-requests "If you'd like to request new strike prices for an option that trades at Cboe, please call our Strike Price Request line, at 1-877-THE-CBOE, and select choice 4 from the main menu. Please understand that not all requests can be accommodated."
On second thought, your not worth fleecing. You won't get a market. https://www.optionseducation.org/toolsoptionquotes/optionscalculator
Hypothetical: Stick with liquid option markets. There are a lot of people with crazy option ideas on ET lately. I have almost given up on this forum.
Man, of course I know the usual option pricing method like Black-Scholes. For a listed equity with options the strike usually does not go over 2x OTM. What if one needs 3x OTM?
Then, you request the strike through the resource that @Option Attack provided. So, let's say the guys at the CBOE stop laughing their asses off and fulfills your request. Who will make the market? Answer: Nobody. Additionally, you can't post an order for less than a penny. So, you will be bidding double at the least.
Why? Isn't it still a fair game for both sides regardless of strike and maturity? And: actually I was interested in longer time frames than the usual 2 years of the LEAPS. For example using BSM calculation for S=$3, K=$9, t=5y, Vola=40% --> C=$0.23, P=$6.23
It's fair. But, is it worth the time to tie up the capital that long? Let's say you do 100,000 contracts for a penny. In this theoretically fair world, a guy takes your $1000 dollars where a whopping $590 is all edge. Now he has to cover $300,000 notional risk (depends on his margin/haircut) for your $500 dollar option? Not gonna happen.