TeenAnalyst.com

In the Money
Term category: Derivatives
In 10 words or less:  When the price of the underlying security is beyond the strike price of the option.

Definition: Options are said to be "in the money" when they have exercisable value.  This occurs when the current price of a stock is above its strike price (call option) or below the strike price (put option).

Advice: Options can still have value if they're out of the money but they can't be exercised until they are in the money.  Ideally, if you buy a call option, you want the stock to rise and eventually become "in the money."

 

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