How Does the Concept of “Moneyness” Relate to OTM, ATM, and ITM?
Moneyness describes the relationship between an option's strike price and the underlying asset's current market price. In-the-Money (ITM) options have intrinsic value.
At-the-Money (ATM) options have the strike equal to the underlying price. Out-of-the-Money (OTM) options have no intrinsic value.
Moneyness is a primary factor determining an option's Delta and its overall premium.
