In the Money, Out of the Money & At the Money Values
An option is considered to be In-The-Money as follows:
call option: when the market value of an underlying stock or security is greater than the striking price of the call.
put option: when the market value of an underlying stock or security is less than than the striking price of the put. |
An option is considered to be Out-Of-The-Money as follows:
call option: when the market value of an underlying stock or security is less than the striking price of the call.
put option: when the market value of an underlying stock or security is greater than than the striking price of the put. |
While
At-The-Money is used to describe when the market value of an
underlying stock or security is right at the same as the striking price.
(see
put call parity )
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