In the money (ITM)

In the money (ITM) is a financial term that applies to both call options and put options. When an option is in the money, this means it has intrinsic value, so a trader can potentially profit from exercising their right to buy or sell an options contract. (Whether they actually profit depends on fees such as premiums or commissions.)

Call options are in the money when the strike price (amount you agreed to pay) is lower than the market price (the current value). Put options are in the money when the strike price (agreed sale price) is higher than the market price.