Yeah I mean for me personally I want them to act like the underlying, which is why I normally do zebras. All the capital efficiency with none of the drawback of having to worry about theta or gamma squeeze or whatever other nonsense random bullshit go that happens with options.
Correct. You will make more money if it keeps going up and lose more money if it goes down.
To be clear I'm not advising to do this, just explaining. at a certain point of being ITM your options just act like shares, depending on where you think the stock will go you may be happy to leave it just acting as a LEAPS, or you may want to continue to chase more gains, or call it a win and cash out and redeploy elsewhere.
Let's not even talk about how to manipulate a market.
Let's say xyz has 200k float and only 30% is shortable.
This time xyz is worth $1.
You short 60k shares for $60grand.
It's option chain goes up to $5.
You buy a bunch of $5 strike calls, then $4 strike calls, then $3 strike calls, then $2 strike calls representing more than 60k shares. When you buy these, they act as magnets pulling price towards them as market makers delta hedge. The closer the price, the stronger the magnet which is why we dif $2 last.
When we bought the $2 calls it triggere a bunch of delta hedging that launched the price through $5. Other people started buying shares and now it's worth $8. You start selling all your options and market makers sold their delta hedges and then price tanked below $3. Now you close the short.
The short lost a bunch of money but the calls made way more
Guy goes to a talent scout. He proceeds to show him his act. He humiliates a country. Shits on it. Fucks in in the ass and pisses on it. In the end the nation is a pathetic shit hole, ashamed and crying in the corner.
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