At-the-money, In-the-money, Out-of-the-money or ATM, ITM, and OTM. These will be terms, used to describe the strike price of an options position, that will be imperative to the understanding of derivatives.
ATM Both calls and puts with ATM strikes have strike prices that are equal to the current price. ITM Calls with ITM strikes have strike prices that are less than the current price. Puts with ITM strikes have strike prices that are greater than the current price. OTM Calls with OTM strikes have strike prices that are greater than the current price. Puts with OTM strikes have strike prices that are less than the current price.
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NishaNinteen year-old trader, future connoisseur of options. Follow me on Twitter!
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