Wednesday, November 26, 2008

Stock Option Terms: Deep in the Money Options (DTM)

Deep in the Money Options (DTM):
Deep in the money calls are options where the price of the underlying security is much greater than the call strike price.

Deep in the money puts are put options where the price of the underlying security is much less than the put strike price.

Deep in the money calls and puts have more intrinsic value relative to extrinsic value than options that are only slightly in the money.

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