What Is ‘In-the-Money’ and How Does It Relate to Exercising an Option?
An option is 'in-the-money' (ITM) when exercising it immediately would result in a profit. For a call option, this means the underlying price is above the strike price.
For a put option, the underlying price is below the strike price. ITM options have intrinsic value and are the only ones that would rationally be exercised.
