Define In-The-Money (ITM) for Both a Call and a Put Option ▴ Learn

Define In-The-Money (ITM) for Both a Call and a Put Option.

A call option is In-The-Money (ITM) when the current price of the underlying asset is higher than the option's strike price. This means the holder can buy the asset below its current market price.

A put option is ITM when the current price of the underlying asset is lower than the option's strike price. This means the holder can sell the asset above its current market price.

ITM options have intrinsic value.

Define “In-the-Money” and “Out-of-the-Money” for a Call Option

What Is the Difference between an ‘In-the-Money’ and ‘Out-of-the-Money’ Option?

How Does ‘Moneyness’ Relate to an Option’s Intrinsic Value?

Does an Out-of-the-Money Option Have Intrinsic Value?