Also found in: Acronyms.


Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Deep Out of the Money

1. A put option with a strike price less than half the value of the underlying asset.

2. A call option with a strike price more than double the value of the underlying asset.

In both these situations, the option contract has no intrinsic value. It is unlikely that the option will be in the money by the time the option is exercised.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
References in periodicals archive ?
The transport entrepreneurs have been up in arms against the decision of the DoTM to permit Mayur Yatayat to operate its buses on the Koteshore-Banepa route.
Third, compared to the method AA10, using the measure MAPE, the errors from RMEL are overall smaller especially when option is OTM or DOTM. Finally, the methods of RMEL and AA10 apparently perform much better than Liu10 because the method of Liu10 has not used any other constraint except the necessary martingale constraint.
On March 11, the Department of Transport Management (DoTM) had reduced transport fares following the global slump in oil prices.