What Is the Concept of "In-the-Money" (ITM) for a Call Option? ▴ Learn

What Is the Concept of “In-the-Money” (ITM) for a Call Option?

A Call Option is "In-the-Money" (ITM) when the current market price of the underlying asset is higher than the option's strike price. In this state, the option has intrinsic value because the holder could immediately exercise the option and buy the asset below its current market value.

The higher the underlying price is above the strike, the deeper ITM the option is. ITM options carry the highest premiums.

How Does ‘In-the-Money’ Status Affect the Value of a Call Option?

How Does the ‘Strike Price’ Determine If an Option Is ‘In-The-Money’?

What Does It Mean to Be ‘In the Money’ (ITM) for a Call Option?

Explain the Concept of Being “In the Money” for a Call Option