Stock Replacement Strategy

So...you want to buy a stock, but can't really afford it. Shares of AMZN are trading at $2,000. You blew most of your wad on those candy options you forgot to sell before Halloween; you only have a few hundred dollars left in your trading account.

Luckily, there's a thing called the stock replacement strategy. You can use options to create a structure that allows you to earn the same return you would get from owning the shares outright. However, it takes less cash to set up than buying the stock itself.

The strategy works by purchasing call options that are deep in-the-money. The goal is to acquire options that give you a delta approaching 1.0, meaning that, as the price of the underlying stock (AMZN in this case) rises 1%, the value of your options bet will also rise 1%. And the price for the options are significantly lower than the $2,000 you'd have to pay for a single share of AMZN.