Options mechanics
What does In-the-Money (ITM) mean for both calls and puts?
By Easy Money Scanner · Educational reference · Not investment advice
The short answer
In-the-money (ITM) means a call's strike is below the current stock price, or a put's strike is above it, so the option has positive intrinsic value right now.
How it works
ITM options carry both intrinsic and extrinsic value and higher deltas, moving more closely with the underlying stock than at-the-money or out-of-the-money contracts of the same expiration.
An example
If XYZ trades at 55, a 50 call is ITM by $5 intrinsic value, while a 60 put is also ITM by $5 intrinsic value.
Risk & limitations
Deep ITM options cost more upfront and can still lose money if the stock reverses direction before expiration despite starting with intrinsic value.
Examples are hypothetical, not trade recommendations. US contract and regulatory references do not automatically apply in Canada. Rules, margin requirements and broker policies can change; confirm them with the relevant authority and your broker.