Basics

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Basics

Moneyness: ITM, ATM, and OTM

Moneyness shows whether an option already has intrinsic value.

Classification

What it means

ITM = intrinsic value exists. ATM = spot and strike are close. OTM = no intrinsic value.

The logic is mirrored for calls and puts.

Example

Spot at 100 EUR

  • Call strike 90 ITM
  • Call strike 100 ATM
  • Call strike 110 OTM
  • Put strike 110 ITM

Visual

Spot meets ATM

Same spot, opposite logic

Same spot, opposite logicSpot 100 EUR. At strike 90 the call is ITM and the put OTM. At strike 100 both are ATM. At strike 110 the call is OTM and the put ITM.Spot = 100 EURCALLITM10 EURATM0 EUROTM0 EURPUTOTM0 EURATM0 EURITM10 EUR90100110Strike (EUR)
  • ITM = In the money
  • ATM = At the money
  • OTM = Out of the money
Amounts show intrinsic value per share. The vertical spot line passes through both ATM fields. Moneyness depends on spot versus strike, not on being long or short. ITM means intrinsic value, not necessarily a profit after premium.