Is there an understood way of determining how far out the money an option can be, before it starts/stops responding to the underlying asset price changes?
I usually look at the greeks, gamma, delta, theta and volatility to determine how an options price will change, but a certain many strikes out of the money (low gamma and low delta), the option will no longer increase or decrease with the underlying asset price, and instead only be affected by volatility and time decay
the greeks clearly explain and illuminate how this phenomena is supposed to happen, but this behavior is different for different assets, and not the same.
One stock, for instance, may have options 10 strikes out of the money that do not experience pricing fluctuations with the underlying asset, while another stock may have options 20 strikes out of the money that reply very actively to the pricing of the underlying asset
is there a way to determine, by just looking at an option chain, how many standard deviations out of the money that the options price will increase / decrease one:one with the underlying assets fluctuations?