How Do Deep-in-the-Money Options Behave in Terms of Their Premium Composition?

The premium of a deep-in-the-money (DITM) option is composed almost entirely of intrinsic value. The extrinsic value, or time value, is very small.

This is because there is a high degree of certainty that the option will expire in-the-money, so there is little value placed on the possibility of further price movements. As an option moves deeper into the money, its extrinsic value diminishes and approaches zero, while its intrinsic value makes up a larger and larger portion of the total premium.