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It would be hard to argue that a 25% or more discount from the current market value was not deep in the money.
According to the IRS, a call option is deep in the money if the strike price falls below the "lowest qualified benchmark." This is usually the highest strike price available on the options market that is less than the current price of the underlying stock; see Sec.
Thus, the existence of these "flexible-term equity options" could cause almost all below-market calls to be deep in the money. If a flexible-term equity option were available at 104 5/8 (1/5 below market), the call referred to at 100 would be deemed to be deep in the money--at least according to the straddle rules.