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Deep in the Money |
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Deep in the money A call option with an exercise price substantially below the underlying stock's market price. Also put option with an exercise price substantially above the underlying stock's market price. Often substantially below is defined as more than one strike price below (for calls)/above (for puts) the current value of the underlying security. Deep in the Money 1. A call option with a strike price less than half the value of the underlying asset. 2. A put option with a strike price more than double the value of the underlying asset. In both these situations, the option contract has intrinsic value. It is unlikely that the option will be out of the money by the time the option is exercised. How to thank TFD for its existence? Tell a friend about us, add a link to this page, add the site to iGoogle, or visit webmaster's page for free fun content. |
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Yes, if you buy deep in the money call options with little extrinsic value. According to the IRS, a call option is deep in the money if the strike price falls below the "lowest qualified benchmark. With CRME trading just shy of the 4 level at last check, this option is deep in the money. |
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