Stock Replacement
Deep ITM calls to replicate stock ownership
What is Stock Replacement?
Stock Replacement Using deep in-the-money call options (high delta, typically 0.80+) to replicate long stock exposure with significantly less capital. The deep ITM call moves nearly dollar-for-dollar with the stock but costs a fraction of the share price, freeing capital for other uses. Risk is limited to the premium paid.
Complete Definition
Using deep in-the-money call options (high delta, typically 0.80+) to replicate long stock exposure with significantly less capital. The deep ITM call moves nearly dollar-for-dollar with the stock but costs a fraction of the share price, freeing capital for other uses. Risk is limited to the premium paid.
Example
Instead of buying 100 AAPL at $150 ($15,000), buy a deep ITM $120 call for $33 ($3,300), getting similar exposure with defined risk.
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