Options trading
In the money (ITM)
Definition
A call whose strike is below the stock price, or a put whose strike is above it. It has intrinsic value: what it would be worth if exercised right now.
Example
Say a stock trades at $55. A $50 call and a $60 put are both in the money by $5, worth $500 per contract if exercised now. In the money does not mean profitable, though: if you paid $7.00 for that call, the stock must be above $57 at expiration before you make money.
Hypothetical numbers, for illustration only.
Also defined in
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