# Put option is in the money. Intrinsic value: The Intrinsic value is the amount by which the strike price of an option is In-the-money. The Intrinsic value for call option will be the underlying stock's price minus its call strike price, whereas for the put option, it is the put strike price minus the underlying stock price. ATM and OTM options don't.

## Put option is in the money. What does In The Money mean in terms of In The Money call and In The Money put options, definitions and examples for the beginning option trader.

A call option is said to be in the money when the current market price of the stock is above the strike price of the call.

It is "in the money" because the holder of the call has the right to buy the stock below its current market price. When you have the right to buy anything below the current market price, then that right has value. That value is also referred to as the option's "intrinsic value. In the world of call options, your call options are "in the money" when the strike price of your calls are less than the current market price of the stock.

The amount that your call options' strike price is below the current stock price is called its "intrinsic value" because you know it is worth at least that amount. This compares to an out of the money call option which is call option where the strike price of the call is above the stock's current market price.

A put option is said to be in the money when the strike price of the put is above the current price of the underlying stock. It is "in the money" because the holder of this put has the right to sell the stock above its current market price.

When you have the right to sell anything above its current market price, then that right has value. That "intrinsic value is equal to at least the amount that your strike price is above the market price. In the world of put options, your put option is "in the money" when the strike price of your put is above the current market price of the stock.

The amount that your put option's strike price is above the current stock price is called its "intrinsic value" because you know it is worth at least that amount. Why are they in the money or ITM?

They are ITM because those call options already have an intrinsic value. This in the money value establishes a minimum or floor price for that option. Why are they in the money?

This value establishes a minimum or floor price for that option. Here are the top 10 option concepts you should understand before making your first real trade:. What are Stock Options? What is a Stock Option? What is a Call Option? What is a Put Option? Deep In The Money Options. Here are the top 10 option concepts you should understand before making your first real trade: What is a Call? What is a Put?

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