Definition
In-the-money / out-of-the-money
ITM = the option already has exercise value (call strike below price, put strike above). OTM = no intrinsic value yet — it is pure bet-on-the-move. Soar leans slightly OTM (~0.40 delta).
Example
A $150 call with the stock at $145 is out-of-the-money — it pays off only if the stock rallies past the strike.Related terms