What Is the Difference between an ‘In-the-Money’ and ‘Out-of-the-Money’ Option?
An option is 'in-the-money' (ITM) if exercising it immediately would result in a profit. For a call option, this means the underlying asset price is above the strike price.
For a put option, the underlying price is below the strike price. An option is 'out-of-the-money' (OTM) if exercising it would result in a loss, meaning the option has no intrinsic value.
