What is In-The-Money (ITM), At-the-money-option (ATM) and Out-of-the-money-option (OTM) in Options?

ITM, OTM, and ATM are referred to as the moneyness of an option or option moneyness. Moneyness is the ratio between the current price of an underlying asset and the strike price of a derivative, usually a call or put option.

In-the-money option (ITM): If the current price of a call option is higher than the strike price, it is referred to as in-the-money (ITM). If the current price of a put option is below the strike price, it is considered in-the-money (ITM).

At-the-money option (ATM): If the current price of the option corresponds to the strike price, this is referred to as an at-the-money option.

Out-of-the-money option (OTM): If the current price of a call option is below the strike price, it is referred to as an "out-of-the-money" option (OTM). If the current price of a put option is above the strike price, it is referred to as an out-of-the-money (OTM) option.