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Part 12 Trading Master Class With Experts

37
Moneyness of Options

Options are classified as:

In the Money (ITM)

At the Money (ATM)

Out of the Money (OTM)

Call Options

ITM: Stock price > Strike price

ATM: Stock price = Strike price

OTM: Stock price < Strike price

Put Options

ITM: Stock price < Strike price

ATM: Stock price = Strike price

OTM: Stock price > Strike price

Moneyness affects premium value, risk, and probability of profit.

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