Define the “Moneyness” of an Option.
Moneyness describes the relationship between an option's strike price and the current market price of the underlying asset. An option is "In-the-Money" (ITM) if it has intrinsic value, "At-the-Money" (ATM) if the prices are equal, and "Out-of-the-Money" (OTM) if it has no intrinsic value.
Moneyness is crucial for determining an option's premium components.
