Moneyness
An option's relationship to the current stock price. A call is in-the-money when the stock is above the strike, at-the-money when the stock sits at the strike, and out-of-the-money when the stock is below it; puts mirror that geometry. Moneyness governs how much of the premium is intrinsic vs. time value, what the delta looks like, and roughly what the market thinks the odds of finishing ITM at expiration are. Reading the option chain as a moneyness ladder is the literacy skill that lets a retail trader pick strikes by probability instead of by feel.
Lessons that use this term
Related terms
American Option · Asian Option · Barrier Option · Basket Option · Butterfly Spread · Calendar Spread
Open this term in the app → — no account needed; browse the full glossary while you research.