ITM

Q: ITM

ITM, or In the money, is an expression that refers to an option that possesses intrinsic value. A call option is ITM if the strike price is below the price of the equity in question. Example: With AAPL trading at $182.50 a 180C would be $2.50 ‘in the money.’ A put option is ITM if the strike price is above the price of the equity in question. Example: With AAPL trading at $182.50 a 185P would be $2.50 ‘in the money.’ An option can also be out of the money (OTM) or at the money (ATM).

Question

ITM

Accepted Answer

ITM, or In the money, is an expression that refers to an option that possesses intrinsic value.

A call option is ITM if the strike price is below the price of the equity in question.

Example: With AAPL trading at $182.50 a 180C would be $2.50 ‘in the money.’

A put option is ITM if the strike price is above the price of the equity in question.

Example: With AAPL trading at $182.50 a 185P would be $2.50 ‘in the money.’

An option can also be out of the money (OTM) or at the money (ATM).