In the Money (ITM) is a situation in binary options trading that arises when the strike price of an asset has surpassed its current market price. In this trading situation, the given asset has some intrinsic value.
When it comes to In the Money and Out of The Money, none of these options are better than each other. It’s because both of them has their pros and cons
What is Call and Put Option in “In the Money”?
A call option in the “In the Money” situation means you can buy the stock. A trader can opt for the call option when the current market price of a commodity is higher than its strike price.
On the other hand, a put option in the “In the Money” situation means you can sell the stock before the expiry time. To opt for the put option, the strike price of a given commodity must be above the market price.
In the money example
Let’s assume that you are trading on silver with its current price of $12 and strike price of $10. Meaning, you are automatically “In the Money”, and you have opted for the call option.
Now, if the current market value increases further, you will make a profit. However, if it falls, you will lose the invested amount.
Similarly, if you have opted for the put option and the current value decreases, you will profit. And if it increases, you will lose.
Options trading comes with a higher possibility of earning more profit. So, with the right knowledge of the “In the Money” situation, you can easily choose the “put” or “call” option and can make a profit.