In The Money, At The Money, Out of The Money – Explained Simply

If you’ve ever felt confused when traders talk about options being “In The Money” or “Out of The Money,” you’re not alone. These terms are critical to understanding how options work — but they don’t have to be complicated.

In this session, I broke down the difference between ITM (In The Money), ATM (At The Money), and OTM (Out of The Money) using clear explanations and simple examples. 

Here’s a quick recap: 

• ✅ In The Money (ITM): The option has real value right now. A call is ITM when the stock is above the strike. A put is ITM when the stock is below the strike.
• 🟡 At The Money (ATM): The option’s strike price is about equal to the stock price. It has no intrinsic value, but the most sensitivity to movement.
• ❌ Out of The Money (OTM): The option would be worthless if it expired now. A call is OTM if the stock is below the strike. A put is OTM if the stock is above the strike.

I also explained how choosing ITM, ATM, or OTM options changes your trade’s cost, risk, and reward potential.
This is one of those foundational concepts every options trader needs to understand — and once you do, many other ideas will become much clearer.

Have questions? Drop a comment in the video — your question might become a future session!