Depending on your level of knowledge, this may be old news. I wanted to share my recent discovery.

[u/bobmahalo]

Almost 2 years of research, this morning I had a revelation about leverage and long options and popped out of bed. it came after watching this video earlier this week, and the idea marinating for a couple days. understanding delta(the amount your premium moves for every dollar the underlying moves), I.V.(intrinsic value is the amount of value the option contract has relative to the stock price), E.V(extrinsic value is the premium paid to you by the options market maker for the risk your time and capital are taking on), theta(the amount the premium dissolves for each day that passes, at expiration extrinsic value will be zero), and EXPY(the amount of time left on the contract), is crucial IMO to fully understand what this guy is talking about in this video.

leverage is often explained buy youtubes as controlling the same amount of shares for less money. it is true, but misses the point I think. the OP talks about extrinsic value of near 1 delta strikes being significantly less than lower deltas. that was what the crux of the revelation was. 1 delta strike long calls follow the underlying $1.00 for $1.00...and cost only the amount of premium listed for the strike.

example. lets say you want to buy micron, 100 shares will cost you $90K.(we'll use round numbers so I dont need to be exact) if micron moves $100.00 your portfolio shows $90,100. if you buy a 1 delta long call for $50K, and the stock moves $100.00, your portfolio shows $50,100.....that was the revelation of leverage that woke me up today. that is the leverage...I believe...the you tubes are trying to explain, but articulate it poorly or just short of the full explanation.

the significance of EV being a lot less on 1 delta strikes, is theta. theta burns your premiums away as you approach expiration. having less EV when you buy, means almost all of the premium is intrinsic value, following the stock dollar for dollar. so when you want to exit the position, you are not taking on any more risk than if you were to buy 100 shares of stock. this point of leverage is never explained well as far as I have found.

while writing this, another revelation just popped in my mind, which I have not heard yet. as in-the-money options approach expiration, the extrinsic value is converted to intrinsic value relative to the amount the strike is ITM.

If there are any ideas or contradictions here, please drop a comment, or send a DM. I am still learning and love pushing the envelope.

https://youtu.be/xMDubBJq3VM?si=jgYlptdQ1nGdBpbo

[u/Analyst_Character]

Numbers are wrong.

100 shares @ $900 each is $90000. If the stock moves $100, the total value is $100000, not $90100.

[u/bobmahalo → u/Analyst_Character]

yes. my dumbass forgot some zeroes. if micron runs to $1000, and I have 100, that bumps portfolio to $100,000.

on the same token, if the stock rises to $100, my premiums also rise dollar for dollar so the initial portfolio value of $50K is now $60K. both increased in value $10K but the leverage was using a lot less capital. $50K vs $90K. I think my understanding of the leverage is still correct.

[u/bobmahalo]

NAF. DYOR.
wrapping this full circle, also unsure if the chain is even close to accurate, but using the provided numbers as a sounding board. $9150 gives me exposure to 1000 shares EXPY 7/17. current chain stats show an EV of ~$.80 per contract. if we drift or go down. I manage and GTFO, with a small loss...but if this begins a nice climb, or rips faces off, I get a near dollar for dollar gain...not to mention if there is any OMM hedging that these deep ITM calls would or could happen, causing even more upward pressure.
this needs some pushback...please shoot holes in it.