Moneyness : In the Money, At the Money, Out of the Money

Moneyness tells option holders whether exercising will lead to a profit. There are many forms of moneyness, including in,out or at the money. Moneyness looks at the value of an option if you were to exercise it right away. A loss would signify the option is out of the money, while a gain would mean it's in the money. At the money means that you will break even upon exercising the option

In The Money :
1. For a call option, when the option's strike price is below the market price of the underlying asset.
2. For a put option, when the strike price is above the market price of the underlying asset.
Example : In The MoneyIn other words, this is when your stock option is worth money and you can turn around and sell or exercise it for a profit.

At the Money :
An option is at-the-money if the strike price of the option equals the market price of the underlying security.
Example : At The MoneyFor example, if XYZ stock is trading at 75, then the XYZ 75 option is at-the-money. You can essentially think of this as the break-even point (when you don't take into account transaction costs).

Out Of The Money - OTM :
1. For a call, when an option's strike price is higher than the market price of the underlying asset.
2. For a put, when the strike price is below the market price of the underlying asset