What Does It Mean for a Call Option to Be "In-the-Money"? ▴ Learn

What Does It Mean for a Call Option to Be “In-the-Money”?

A call option is "in-the-money" (ITM) when the current market price of the underlying cryptocurrency is higher than the option's strike price. This means the option has intrinsic value.

For example, if Bitcoin is trading at $65,000, a call option with a strike price of $60,000 is in-the-money by $5,000. The holder could theoretically exercise the option to buy Bitcoin at $60,000 and immediately sell it at the market price of $65,000 for a gross profit of $5,000 (before accounting for the premium paid).

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How Does the Stock Price Affect the ITM Status of a Call Option?

How Does the Strike Price Relate to an Option Being “In-the-Money” (ITM)?

What Does It Mean for an Option to Be “Out-of-the-Money” (OTM)?