What is OTM in Nifty?
Any option that does not have an intrinsic value is classified as ‘Out of the Money’ (OTM) option. If the strike price is almost equal to spot price, then the option is considered as ‘At the money’ (ATM) option.
What is ITM call option?
A call option is in the money (ITM) when the underlying security’s current market price is higher than the call option’s strike price. The call option is in the money because the call option buyer has the right to buy the stock below its current trading price. “In the money” describes the moneyness of an option.
What are ITM and OTM options in options?
Nifty option chain gives a quick picture of in-the-money and out-of-the money options. While the strikes shaded in yellow are the ITM options, the un-shaded strikes are the OTM options. This rule applies to calls and to puts.
What is the difference between ITM and ATM?
b) A put option is said to be ITM if the strike price is more than the current spot price of the security. a) A call option is said to be in ATM if the strike price is equal to the current spot price of the security. b) A put option is said to be ATM if the strike price is equal to the current spot price of the security.
What are OTM options for JP Morgan stock?
In the case of JPM, OTM options include the 150-strike call and every strike above that. Put options that are OTM for JPM include 148 and above. Put options are OTM if the strike price is lower than the underlying price. Since the OTM option has no intrinsic value, it holds only time value.
What are the chances of ITM expiring at expiration?
The option would have better than a 50\% chance of expiring ITM at expiration. In addition, the option would make about 0.62 (or $62 in real terms) for every dollar the stock moved higher all other factors held equal and the delta would get larger. The tradeoff here is the cost and risk.