Why Is a Long-Dated ITM Option Sometimes Referred to as a Synthetic Stock Position?

A long-dated In-the-Money (ITM) option, particularly a call, is often called a synthetic stock position because its Delta is very close to 1. This means its price movement nearly perfectly mirrors the price movement of the underlying asset.

The key advantage is that the trader achieves exposure to the underlying asset with a fraction of the capital required to buy the asset outright. The option premium acts as a leveraged way to control the asset, and the long duration minimizes the impact of time decay (Theta).