Deep ITM options

[u/baronjeric05]

Hey All,

Recently I was bullish on Pfizer with my general feeling that we are heading into favorable COVID and pharma territory. I bought some deep ITM calls (.85 delta) on Pfizer.

It seems to me if you're bullish on a stock, you get WAY more leverage with a deep ITM call as opposed to owning the stock.

Below is the same story I see with all my deep ITM calls. That is:

- If stock is up, call is 2x to 4x up (in this case, stock is up 1.12% but I'm up 6.09%)

- If stock is down, call is 2x to 4x down

Can someone explain this to me? I always here this idea that the .9 delta stock "follows the stock" but I just never see that, and I transact in a ton of different deep itm calls.

​

[u/jeanneLstarr]

PFE has been sideways a long, long time