In The Money



1. For a call option, when the option's strike price is below the market price of the underlying asset.

2. For a put option, when the strike price is above the market price of the underlying asset.

Being in the money does not mean you will profit, it just means the option is worth exercising. This is because the option costs money to buy.


In the money means that your stock option is worth money and you can turn around and sell or exercise it. For example, if John buys a call option on ABC stock with a strike price of $12, and the price of the stock is sitting at $15, the option is considered to be in the money. This is because the option gives John the right to buy the stock for $12 but he could immediately sell the stock for $15, a gain of $3. If John paid $3.50 for the call, then he wouldn't actually profit from the total trade, but it is still considered in the money.


  1. Far Option

    The option with the longer time to expiration in a calendar option spread, which ...
  2. Call Option

    An agreement that gives an investor the right (but not the obligation) to buy ...
  3. Exercise

    To put into effect the right specified in a contract. In options trading, the ...
  4. At The Money

    A situation where an option's strike price is identical to the price of the ...
  5. Underwater

    An option that would be worthless if it expired today. An underwater option ...
  6. Out Of The Money - OTM

    A call option with a strike price that is higher than the market price of the ...
  7. Put Option

    An option contract giving the owner the right, but not the obligation, to sell ...
  8. Strike Price

    The price at which a specific derivative contract can be exercised. Strike prices ...
  9. Deep In The Money

    An option with an exercise price, or strike price, significantly below (for ...
  10. Moneyness

    A description of a derivative relating its strike price to the price of its ...
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