How Does a Deep ITM Option’s Premium Relate to Its Intrinsic Value?

The premium of a deep In-The-Money (ITM) option is dominated by its intrinsic value. As an option moves deeper ITM, its intrinsic value increases significantly, while its extrinsic (time) value tends to decrease, though not to zero.

The option's premium will closely track the intrinsic value plus a small, residual amount of time value. This is because the probability of the option moving OTM before expiration is low, reducing the value of the "time" component.