All termsOptions FundamentalsStart here
In the Money
An option is in the money when it has intrinsic value based on the relationship between the underlying price and strike price. A call is in the money when the underlying price is above the strike. A put is in the money when the underlying price is below the strike. Example AMZN = $270 $260 Call = ITM $280 Call = OTM For puts: $280 Put = ITM $260 Put = OTM
Why it matters to you
ITM does not automatically mean the trade is profitable. A trader may have paid a premium greater than the option's current value. That distinction is extremely important.