Lifecycle Investing through index options

... how it can be efficiently implemented through deep-in-the money index/ETF options, which can provide this leverage. Such options with the strike price equal approximately to half of the current index value give 2/1 leverage.

Buying an option with a strike price of 1/2 the underlying's price is merely an arbitrary number. Let's look at this in a different way.

A very deep ITM call LEAP with a delta in the 90's will almost duplicate the performance of the underlying. It also has the advantages of low time premium cost and low theta decay. But these are quite expensive. 90 delta call LEAPs can be had at a strike price above the 50% level (1/2 the price of the underlying).

If you're willing to pay a bit more time premium and buy an 80 delta call instead of a 90 delta call, you might pay 25% less for the call (actual pct discount will vary based on the implied volatility and the time remaining until expiration).

Another way to achieve 2:1 leverage is to buy three 66 delta calls. This will cost more time premium but the total cost should be less. You'll have to evaluate all of the possibilities (drop the quotes with deltas into a spreadsheet).

Your 'participation rate' is how much you will gain per dollar move in the underlying. So if you own 3 calls each with a delta of 67, you currently have 2:1 leverage. But technically, you have 3:1 leverage because an option itself is leverage (delta will increase as the underlying increases).

Here are some other suggestions:

Consider the possibility of rolling your calls up as they achieve decent profit. You'll give up some delta but you'll lower cost basis and risk.

Roll your LEAPs out to a later expiration when theta decay starts to become significant. To evaluate this, calculate premium per day. It will depict the possible cost savings.

LEAPs have very wide B/A spreads. Do not pay market prices. Work your orders and try to get fills at the midpoint or better.

To lower total cost (your capital issue), consider the possibility of vertical or diagonal spreads. Unfortunately, the trade off will be capping your potential gain. The premium received for the short leg could pay for much/most of the time premium of a high delta LEAP. However, this is a very different game than the open ended leverage you seek.