deep-in-the-money

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.

Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

deep-in-the-money

Used to describe a call (put) option that has a strike price considerably less (more) than the market price of the underlying stock. A deep-in-the-money option is almost certain to be exercised on or before its expiration.

Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.