How Does the Moneyness of an Option (ITM, ATM, OTM) Relate to the Strike Price?

Moneyness describes the relationship between the underlying asset's current price and the option's strike price. An option is In-The-Money (ITM) if exercising it immediately would yield a profit.

For a call, this means the stock price is above the strike price. An option is At-The-Money (ATM) if the stock price is equal to the strike price.

An option is Out-of-The-Money (OTM) if exercising it immediately would result in a loss, meaning the stock price is below the strike price for a call.