A deep out-of-the-money option which is sold, because it is very much out-of-the-money, at low price. Such an option costs very little money because the possibility of its exercise is very low. However, the option may have the potential to gain a lot of money should it go into the money. That is why most dealers tend to refrain from selling such options- actually, they make very little in return (low premiums), but may incur big losses if the short options turn in the money.

Many dealers don’t see in the small premiums any sufficient return to compensate for the risk involved.