In-The-Money Option

A call option is said to be in the money when the strike price is below the current trading price of the underlying asset. A put option is said to be in the money when the strike price is above the current price of the underlying asset. An in the money option indicates that the buyer of the option would most likely choose to exercise the option contract.

Example

Suppose a stock ABC is trading at $15. If the strike price of a call option is $14, then the call option is said to be in the money. If the strike price of a put option is $17, then the put option is said to be in the money.