Define In The Money

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In the money (ITM) is a term connected to an option contract. ITM indicates that the option has value in a strike price favorable in comparison to the prevailing market price of the underlying asset.

  • An in-the-money call option means the option holder has the opportunity to buy the security below its current market price.
  • An in-the-money put option means the option holder can sell the security above its current market price.