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Using a high delta call LEAP as a surrogate for owning the underlying is called a Stock Replacement Strategy (your example of buying a $40 call LEAP with the stock at $70).. Assuming that the implied volatility is reasonable, because the call is deep ITM, you'll pay a modest amount of time premium and you'll have very little time decay (theta) in the ...


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Option premium decay is non linear. It speeds up as time passes. To get a imprecise idea of this, a loose rule of thumb for ATM options is that their value is related to the square root of the time remaining. All other things being equal (they never are), following this loose estimation, for a 9 month put, 1/3 of its value is lost in the first 5 months. ...


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You need to buy the option before the market prices in this potential profit. If all experts now already expect the company to become profitable in a year, it is most likely already priced in and the company reporting a profit will not influence the share value necessarily. However, if the profit that is reported in a year is really slim, while everyone is ...


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