2. A put option with a strike price more than the value of the underlying asset.
In both these situations, the option contract has intrinsic value. If an option is deep in the money, it is unlikely that the option will be out-of-the money by the time the option is exercised.
An option is in-the-money at any point up to expiration if the exercise price is below the market price of a call option or above the market price of a put option. That means an in-the-money option has value.
For example, if you hold an equity call option with a strike price of 50, and the current market price of the stock is $52, the option is in-the-money.
As the option holder, you could buy the stock at $50 and either sell it at $52 or add it to your portfolio. Or, if you preferred, you could sell the option, potentially at a profit.
In-the-money options are generally among the most actively traded, especially as the expiration date approaches.