Traders define options as "in the money" (ITM) or "out of the money" (OTM) by the strike price's position relative to the market value of the underlying stock, commonly called its moneyness.

Traders define options as "in the money" (ITM) or "out of the money" (OTM) by the strike price's position relative to the market value of the underlying stock, commonly called its moneyness.

Out of the Money (OTM) vs. In the Money (ITM) Options The opposite of out of the money is “in the money.” Options contracts that do have intrinsic value are considered in the money.

Investors can sell to open out-of-the-money (OTM) or in-the-money (ITM) call(s) when establishing a short call position. The ideal scenario when selling OTM uncovered calls is when the underlying does ...