India VIX Index
Educacional

Part 4 Learn Institutional Trading

30
In the Money (ITM), At the Money (ATM), Out of the Money (OTM)

Depending on the strike price relative to the current market price, options are classified as:

ITM Options

Have intrinsic value.

Call: Strike < Spot

Put: Strike > Spot

ATM Options

Strike = Spot (approximately)

Mostly time value.

OTM Options

No intrinsic value; only time value.

Call: Strike > Spot

Put: Strike < Spot

OTM options are cheaper and used by beginners often, but they carry high risk.

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