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Is a Deep In-the-Money Option Considered Substantially Identical to the Underlying Stock?

Yes, a deep in-the-money (DITM) call option, or a DITM put option combined with a short position in the underlying stock, may be considered substantially identical to the underlying stock. This is because the DITM option's price movement closely mirrors the stock's price movement, and the option essentially gives the holder control over the stock.

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