Definition Definition

At-The-Money, In-The-Money & Out-of-The-Money

An option whose exercise price is the same as the spot price of the underlying currency is said to be at-the-money (ATM).

An option that would be profitable, excluding the cost of the premium, if exercised immediately is said to be in-the-money (ITM).

An option that would not be profitable, again excluding the cost of the premium, if exercised immediately is referred to as out-of-the-money (OTM).

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