Investor Glossary-deep out of the moneyInvestor Glossary-deep out of the moneyInvestor Glossary-deep out of the moneyInvestor Glossary-deep out of the moneyInsightful stock market charts - Click here
investor
Categories    # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Deep Out Of The Money

The HTML to link to this page
 

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 unfavorable 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.



Rate this deep out of the money definition...

Learn about investing with the Investor Glossary Term of the Day


Click here for insightful stock market charts. Where is the market headed? The answer may surprise you. Find out
with the exclusive & Barron's recommended charts of Chart of the Day.


Popular Terms: in escrow, wholly-owned subsidiary, risk management, phantom income, class C shares, deferred tax, minority interest, 1031 exchange, command economy, stock market close, VIX, 144a, average price per share, cancelled check, deferred revenue, 401a, 1035 exchange, EBITDA, required rate of return, debt service coverage, option premium, current ratio, margin rate, open position, limit order, reverse mortgage, FICO score, Zero Cost Collar, covered put, ex-dividend, FTSE, real GDP, liquidity ratio, LIBOR, labor relations, balance sheet, implied volatility, Key Rate Duration, irrevocable trust, diluted share, quality assurance, retained earnings, stock split, inflation, APR, ex-dividend date, dividends payable, annual return, per diem


Accounting | Banking | Bonds | Brokers | Economy | Futures | Mutual Funds | Options | Real Estate | Retirement | Stocks | Taxes | Technical Analysis
Home | Term of the Day | Suggest a Term | Chart of the Day | Dogs of the Dow
©2004-2016 Investor Glossary - All rights reserved - Terms of Use