Define: Deep Out Of The Money

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Definition: Deep Out Of The Money



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Full Definition of Deep Out Of The Money


A deep out of the money option is presently worthless. An option is said to be deep out of the money when the exercise (strike) price of the option is extremely unfavourable relative to the current market price of the underlying security. The greater the gap, the further deep out of the money the option is said to be. When the option is close to expiration, it is deep out of the money when the spread between the strike price and the current underlying asset’s market price is sufficiently great that the chance the deep out of the money option will ultimately be in the money at expiration is very low. Deep out of the money options tend to stay out of the money, if not deep out of the money. A call option is deep out of the money when the strike price is well above the current market price of the underlying asset. A put option is deep out of the money when the strike price is well below the current market price of the underlying asset.


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Deep Out Of The Money. PayrollHeaven.com. Retrieved April 10, 2020, from PayrollHeaven.com website: https://payrollheaven.com/define/deep-out-of-the-money/

Definition Sources


Definitions for Deep Out Of The Money are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 7th February, 2020