Part 12 Trading Master Class

In-the-Money (ITM), At-the-Money (ATM), Out-of-the-Money (OTM)

These terms describe the relation between strike price and market price.

Call options:

ITM: market price > strike

ATM: market price = strike

OTM: market price < strike

Put options:

ITM: market price < strike

ATM: market price = strike

OTM: market price > strike

ITM options cost more because they already hold intrinsic value.