In the money
Also called: ITM, at the money, ATM
An option is in the money when exercising it now would pay something: a call whose strike is below the stock price, or a put whose strike is above it. At the money means the strike equals the price.
In-the-money options cost more because they already carry intrinsic value. At expiry, only in-the-money options pay out.
Example
With a stock at $60, a $50 call is $10 in the money and a $50 put is out of the money.
Related terms
- Out of the money: An option is out of the money when exercising it now would pay nothing: a call with a strike above the stock price, or a put with a strike below it.
- Strike price: The strike price is the fixed price at which an option lets its holder buy (for a call) or sell (for a put) the underlying stock.
- Option premium: An option's premium is the price paid to buy it.
Practise with $10,000 in play money
Free. No real money involved.
For learning only. This isn't financial advice.