ATM, ITM, and OTM Options
Option moneyness is a way to determine where the strike price is of a strategy in relation to the current market value of the stock. There are 3 broad categories that all options are thrown into: At-The-Money options have strike prices very close or at the same price as the underlying stock. Out-of-The-Money options have strike prices that are below the stock price for put options or above the stock price for call options. In-The-Money options have strike prices that are above the stock price for put options or below the stock price for call options. This video offers you a couple different handy charts as well as a visual aid to better understand this important concept as it relates to these different option categories.