What is In the Money?

2020-08-18 07:40    forextraders

In the Money Definition. In the Money, or “ITM”, is a term that refers to a call or put option that has intrinsic value because the exercise price is below or above, respectively, the current market price of the underlying security, commodity or currency. An ITM forex call has a currency price that is higher than the strike price. An ITM forex put has a currency price that is lower than the strike price. When currency options are “in the money”, the owner must decide whether to hold the option to expiration or sell beforehand for a profit while it exists. ITM is one state for an option. The other two are “Out Of The Money”, or OTM, options and “At The Money”, or “ATM”, options.

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