What is In the Money (ITM)?

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In the Money (ITM) is a term in options trading that describes a contract with intrinsic value, meaning it would be profitable to exercise immediately (excluding transaction costs). For a call option, ITM occurs when the underlying asset's price is above the strike price, while for a put option, ITM occurs when the underlying asset's price is below the strike price.

In the Money (ITM)

What is In the Money (ITM)?

What is the precise calculation for determining if an FX option is In the Money (ITM), and how does it relate to intrinsic value?

How does the concept of In the Money (ITM) specifically apply to currency options, and what are the implications for hedging and speculation in the FX market?

Why are In the Money (ITM) options generally more expensive than At the Money (ATM) or Out of the Money (OTM) options, and what role does time value play in their premium?

When should a currency trader consider exercising an In the Money (ITM) option, and what are the key risks and opportunities associated with ITM positions near expiration?

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