Little capital to buy a stock by using deep in the money call



Deep In-The-Money AMZN Calls

For example, buy a AMZN stock call option contracts that expire on Sept. 15, 2023. Since the strike price was $50.00, which is $32.92 below the price today at $82.92 per share. Since it paid only $36.63 at the midprice for these calls, there is a huge amount of intrinsic value in the investment.

That means that $32.92 of the total $36.63 paid has real value, or 90% (i.e., $32.92/$36.63).

This is because if AMZN stock stays at $82.92 by Sept. 15, 2023, the calls would close at $32.92. And since there is almost 9 months for this to work out, paying a 10% premium over today's price does not seem too excessive.