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What is moneyness of an Option ?

The moneyness of an option contract is a classification method wherein each option (strike) gets classified as either – In the Money (ITM), At the Money (ATM), or Out of the Money (OTM) option.

In the Money Call option : An In-the-Money call option refers to a call option whose strike price is less than the spot price of the underlying assets.

AT the Money Call option : An At-the-Money call option refers to a call option whose strike price is approximately equal to spot price of the underlying assets.

Out of the Money Call option : An Out-of-the-Money call option refers to a call option whose strike price is higher than the spot price of the underlying assets.


In the Money Put option : An In-the-Money Put option refers to a put option whose strike price is higher than the spot price of the underlying assets.

AT the Money Put option : An At-the-Money Put option refers to a call option whose strike price is approximately equal to spot price of the underlying assets.

Out of the Money Put option : An Out-of-the-Money Put option refers to a call option whose strike price is less than the spot price of the underlying assets.

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