Define ‘Moneyness’ in the Context of Options Trading and Its Three Classifications.
'Moneyness' describes the relationship between the underlying asset's current market price and the option's strike price. It is classified into three categories: 'in-the-money' (ITM), 'at-the-money' (ATM), and 'out-of-the-money' (OTM).
ITM options have positive intrinsic value. ATM options have the strike price equal to the market price.
OTM options have no intrinsic value and are unlikely to be profitable upon expiration.
