1. saving buying power, yes, which is to leverage. but the actually cost might be higher than buying shares directly
2. yes, limits losses during down market. but it's double side sword. delta goes down in the down market, but when market bounces back, you will gain less as well as the delta is lower. the delta control is up to you.
people long leap and short short-term options to arbitrage the IV differences. but there are other ways for leveraging, such as buying futures, buying shares directly
是不是？
啊哈哈哈。 。 。
啊哈哈哈。 。 。
This acutally is just a leverage trade on directional bet. is there any risk management consideration comparing owning the shares?
if it's option value, the exposure acutally is much larger?
just curious. Options has time decay even if it's small with deep in the money, much more than the interest from the cash holding.
1. saving buying power, yes, which is to leverage. but the actually cost might be higher than buying shares directly
2. yes, limits losses during down market. but it's double side sword. delta goes down in the down market, but when market bounces back, you will gain less as well as the delta is lower. the delta control is up to you.
people long leap and short short-term options to arbitrage the IV differences. but there are other ways for leveraging, such as buying futures, buying shares directly
liquidity太差。
long the longer term calls and short/roll the short term calls
higher leverage