Let's say you wanted to invest in the S&P 500 in a buy and hold fashion. The following are some examples and costs associated:
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1. 50 shares of SPY @ $590. This might cost $30k, give you $30k exposure in SPY, and use no leverage.
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1. 1 90-delta deep in the money LEAPS SPY call option. This might cost $19k, give you $60k exposure in SPY, and use 2-3x leverage.
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1. 1 synthetic LEAPS in SPY (long call option, short put option). This might cost $2k, give you $60k exposure in SPY, and use 30x leverage.
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1. 1 /MES future. This might require $2k deposit (it costs nothing), give you $30k exposure in SPY, and use 15x leverage.
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1. 50 shares of SPY @ $590. This might cost $30k, give you $30k exposure in SPY, and provide no leverage.
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1. 1 90-delta deep in the money LEAPS SPY call option. This might cost $19k, give you $60k exposure in SPY, and provide 2-3x leverage.
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1. 1 synthetic LEAPS in SPY (long call option, short put option). This might cost $2k cash, $7k in buying power, give you $60k exposure in SPY, and provide 6x leverage.
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1. 1 /MES future. This might require $2k deposit (it costs nothing), give you $30k exposure in SPY, and provide 15x leverage.
In all cases but the first, you are paying less to have a higher exposure in the same market. Each has a different risk profile. In all cases you can lose money.