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Open in appMoneyness describes an option's intrinsic value right now and has three categories: at the money (ATM), in the money (ITM) and out of the money (OTM).
This lesson explains each type and the concept of premium. ITM options are steadier and less affected by time decay, OTM options carry higher risk with larger potential moves, and ATM options sit in between and are used in strategies like straddles. It helps beginners choose a strike that fits their risk tolerance and view.
What you’ll learn
✓Concept of moneyness
✓ATM, ITM and OTM options
✓How time decay affects each
✓Choosing a strike for your view and risk
Read and practise
SPEAKERDharmendra RajbharTrainer
PGDM in finance, having 5+ experience in Equity, commodities , forex analysis and trading.
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