Options Basics

ATM, ITM, and OTM Options

Moneyness is used to describe the amount of intrinsic value for an options contract. Moneyness is described in three ways: in-the-money(ITM), at-the-money(ATM), and out-of-the-money(OTM).
ATM, ITM, and OTM Options
Kirk Du Plessis
Apr 19, 2021

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.

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