Fool standing about by deep chasm (5)
I believe the answer is:
abyss
'deep chasm' is the definition.
(I've seen this before)
'fool standing about by' is the wordplay.
'fool' becomes 'ass' (both can mean a stupid person).
'standing about' indicates putting letters inside.
'ass' going around 'by' is 'ABYSS'.
(Other definitions for abyss that I've seen before include "something rather deep" , "canyon?" , "deep depression" , "Deep gulf" , "gaping hole" .)