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What Type of Risk Is Reduced by Buying a DITM Option?

The risk of losing the entire premium due to time decay is reduced.
Greeks.Live22.11.25

What Type of Risk Is Reduced by Buying a DITM Option?

Buying a Deep In-The-Money (DITM) option reduces the risk of losing the entire premium due to time decay. Since DITM options have a high intrinsic value and low time value, they are less sensitive to Theta decay compared to ATM or OTM options.

What Is “Theta” and How Does It Measure Time decay’S Effect on an Option’s Value?
What Is the Primary Risk of Buying an OTM Option?
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?

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