How Does the Concept of "Deep In-the-Money" Differ for Calls and Puts? ▴ Learn

How Does the Concept of “Deep In-the-Money” Differ for Calls and Puts?

A deep-in-the-money call option has a strike price significantly below the current market price of the underlying asset. For example, a call option with a $20 strike price on a stock trading at $50.

A deep-in-the-money put option has a strike price significantly above the asset's current market price, such as a put with a $80 strike on the same $50 stock. In both cases, the option has a high intrinsic value and a delta approaching 1.00 for calls and -1.00 for puts, meaning it behaves very similarly to the underlying asset.

What Is ‘In the Money’ (ITM) for an Option?

What Does It Mean for an Option to Be “In-the-Money” (ITM)?

How Does the Strike Price Relate to an Option Being “In-the-Money” (ITM)?

When Is an Option Considered ‘Out-of-the-Money’?