why wouldn't everyone buy a deep itm option and keep the rest in cash. for example right now apple is at 134.16 buy a 120 strike that expires in a month that is trading at 14. keep the other 12000 in cash. if apple shoots up u have all the upside and if it crashes tomorrow to 120 u might still have 3 dollars premium as the farther down it goes the the more the delta decreases, and the max loss is 1400. yes, i know i am not the genius that thought of this first. but this is fairly simple and i don't see a downside to this. can someone tell me the drawbacks? obviously this strategy is best to do when the bid ask on the option is not to wide.
AAPL210521C00120000 2021-04-16 3:59PM EDT 120.00 14.90 14.95 15.10 -0.40 -2.61% 817 21,548 33.89% It's a perfectly viable idea, but the devil is in the details. The last offer in the option was $15.10, BUT THESE ARE ALL STALE QUOTES. It also goes x $.205 in May. The deeps generally quote $.10 to .20 wide, but it's reasonably possible to fill midpoint as it trades all 16 venues.
If you're so sure it is going up then buy 2 x ATM calls. Risk is even less and 1 to 1 move with the stock. Risk can be reduced much further. Fire up TOS and be creative.