In-the-money (ITM)
ITM means the option currently has intrinsic value at the current underlying price.
Quick facts
| Field | Value |
|---|---|
| Category | Options Trading Terminology |
| Use | Learn vocabulary to read chains and manage risk |
Definition
In-the-money (ITM) indicates the option would have positive intrinsic value if it expired right now. ITM options are typically more sensitive to price moves (higher delta) and often cost more than OTM options.
Quick example
Info
If spot is 105, a 100 strike call is ITM (intrinsic value ≈ 5).
Why it matters
- Higher delta (moves more with underlying)
- Higher premium (more intrinsic value)
- Different behavior near expiry
Intrinsic value at spot 105 (call strikes; illustrative)
ITM strikes have intrinsic value; ATM and OTM have zero.
Summary
- ITM = has intrinsic value right now.
- Useful for selecting strike sensitivity and cost.