How Does a Very High Intrinsic Value Affect the Option's Liquidity? ⎊ Path

How Does a Very High Intrinsic Value Affect the Option’s Liquidity?

A very high intrinsic value, meaning the option is deep in-the-money (DITM), often leads to lower liquidity. Most trading volume is concentrated in ATM and near-OTM options.

DITM options are often held as a proxy for the underlying asset, resulting in fewer buyers and sellers.

Why Does a Deep-in-the-Money Option Have Very Little Extrinsic Value?

What Is the Practical Difference between a DITM Option and Owning the Underlying Asset?

Why Do DITM Options Have Less Time Value than ATM Options?

What Is a “Deep In-the-Money” Option?

Why Do Deep Out-of-the-Money Options on Bitcoin Often Have a Very Low Delta?

How Does Gamma Behave for a DITM Option?

What Happens to the Time Value When the Option Is Deep In-the-Money?

What Is the Delta of a Deep In-the-Money Call Option?

Glossar

Very High Intrinsic Value

Definition ⎊ Very high intrinsic value in an options contract signifies that the option is deep in-the-money, meaning the immediate profit from exercising the option is substantial.