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Deep-in-the-Money

   Also found in: Acronyms 0.01 sec.
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.

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.


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Peak call open interest for September, meanwhile, totals a mere 1,600 contracts at the deep-in-the-money 7.
For that reason, one can make a compelling argument that at some level, a deep-in-the-money European-style option bears a strong resemblance to a true financing.
This fixed interval system was a basic assumption of the legislative approach and the basis for the definition of a deep-in-the-money option.
 
 
 
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