Question

Why would deep-in-the-money options never expire unexercised?

Answer 1

The deep-in-the-money options will have a strike or an exercise price, highly above (for a put option) or below (for a call option) the market price of the underlying asset. The value of such an option will be approximately all intrinsic value and premium at minimal. It makes no sense that the deep-in-the-money options expires unexercised by the counterparty because deep-in-the-money options are excellent investments for long-term investors as it has approximately 100% delta, indicating that the price alters with every point change in the price of underlying asset's. Unlike the stock, the options have a limited lifespan thus the investor requires the underlying stock to move in the desired direction within the defined time frame for making the profits.