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In The Money


What does In The Money mean?

An option contract that, if it is exercised today, has worth more than $0. It has appositive value. A call option is said to be in the money when its exercise price is below the current price of the underlying asset. Put options are in the money when the exercise price is above the market price of the underlying asset.

Futures Knowledge Explains In The Money

For example, a call with a strike price of $1100 on gold trading at $1125 is in-the-money $25. The option holder could buy Gold at $1100 and sell it for $1125. The intrinsic value of this call option is $25. The option holder can make a profit.

Similarly, a Gold put option with a strike price of $1150 is in the money because the option holder could buy Gold for $1125, then turn around and sell it via the option for $1150. The intrinsic value of the put option is $25.



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