These are pretty good Optionetics articles. Essentially, a long-term call can be thought of as owning an underlying stock, especially if it’s an in-the-money call and an expiration date farther into the future, because it has intrinsic value and is a more long-term holding than a front month call that you would sell against it. I did something like this on AAPL in November: bought a 2-month 75 ITM call, sold an 85 strike front-month calls for 2 months.  It worked out nicely as long as AAPL stayed above my long-term call’s strike price (75) which it did. And since it’s ITM I get more delta on the 75 strike’s gains.  My goal is to just get the calls I sell to pay for my theta (time decay) costs of owning the longer term call, which makes it cheaper to own than owning the stock outright.

Part 1
http://www.optionetics.com/market/articles/20794

Part 2
http://www.optionetics.com/market/articles/20826

You could also consider something like this using synthetic stock but it brings more downside risk.

LVS has just been absolutely murdered this year, down about 96%!  However, some are starting to call a bottom here and it could be due for at least a brief snapback.

While looking at this stock I see a couple of interesting options opportunities.

1) 5.00/7.50 vertical spread.  At this price the spread would cost you, at market prices, $0.90 (buy the 5.00 strke for $1.10, sell the 7.50 strike for $0.20), but the 5.00 strike is already $0.58 ITM so the extrinsic cost of the spread is just $0.32 as long as the stock stays above $5!  The max profit is $1.60 (7.50-5.00-0.90).  However, since the 5.00 strike is ITM and has $0.58 of instrinsic value, you’re only risking $0.32 of time value.  Therefore, it’s possible that the spread could be worth $2.50 at or near expiration, when you only put $0.32 at risk, an almost 8:1 reward ratio.

2) Going synthetically long (buying the 5.00 call, selling the 5.00 put) would cost you $0.70 (1.10 - 0.40) and, near expiration, for every dollar the stock rises, the value of the synthetic stock rises.  Synthetic stock is very risky since if the stock goes down you can lose money very quickly as well.  But if you’re very certain it’s bottomonig out here, a synthetic long gets you in the stock at $.070 instead of $5.58, risking much less money up-front to get long the stock.  If the stock goes to $8, for example, the $0.70 position would be worth $3.00 since the 5.00 call would be $3.00 ITM and the 5.00 put would be worthless.  That would be a 329% gain!  However, if you bought the stock and it went to $8, that would be just a 43% gain.

However, there are 6 trading days left before expiration so these moves would have to happen soon, but with this market so volatile it’s certainly within the realm of possibilities.  Again, as a warning, synthetic stock is very risky.  If you trade these do so with very little capital that you’re OK with completely losing, because it could easily happen.