ITM, ATM & OTM (Moneyness)

Also known as: in the money, at the money, out of the money, moneyness

Moneyness describes an option’s strike relative to the spot price. In-the-money (ITM): exercising now has value — a call below spot, a put above. At-the-money (ATM): strike ≈ spot, all time value, highest theta. Out-of-the-money (OTM): no exercise value yet — cheap, low delta, and most likely to expire worthless. Premiums, Greeks and win-odds all flow from moneyness.