For a long time, you were requesting to have a thorough video on In the Money (ITM), At the Money (ATM), and Out of the Money (OTM) strike prices, with all relevant information. For example- which strike price or intrinsic value can you call in, at, or out of the money option?
So, traders, now that we have arrived, we’ll talk about three things: The first thing we will discuss is ITM, which stands for “in the money” (ITM). We also have ATM, which stands for “at the money,” and OTM, which stands for “out of the money.” Let’s discuss all these things important to you one by one. Let’s begin by discussing ITM.
So, what happens in ITM?
Assume that the current value of Nifty or Bank Nifty, or the price of any stock, is 500. What would happen if you choose its strike price in the option at 500 only, whether in call or put? If we suppose that the market is rising on the call side, what happens if we add CE to 500? It means that there is a market on 500 exclusively, and if we want to buy 500 only, we will be right on the money. It signifies that the strike price you’ve chosen is absolutely where the market is trading right now.
The second thing to remember is that if someone advises you to take in the money, it signifies the market is moving, and the one you want to buy is now at 500. Which already has the price; it refers to values before to 500, right? 450, 460, 470, 80, 90, etc. Similarly, those values are less than 500. Therefore whichever strike price you choose will be profitable.
We’ll have OTM as the third option. We’re talking about the call side here, so as we move forward- keep in mind that we’re talking about moving to the higher side, where the market is at 500 and prepping for 600.
In that case, what will happen if OTM values are above 500 in the future, such as 510, 520, or 530? For example, if the price is above 500, we will refer it as OTM on the call side.
ITM VS ATM VS OTM
Finally, if we compare these two on a trading chart- the significant difference will be that the call in the money changes to put in out of the money option, whereas the put in out of the money becomes a call in the money option. It is a pretty straightforward relationship in Call and Put, and OTM and ATM, and you’ll notice that most of the trades are executed only after relating to ATM, OTM, and ITM. Also, the most crucial part which remains in it is of- in the money and out of the money. How? That will become apparent to you in the following days.
So, traders, now that we have arrived, we’ll talk about three things: The first thing we will discuss is ITM, which stands for “in the money” (ITM). We also have ATM, which stands for “at the money,” and OTM, which stands for “out of the money.” Let’s discuss all these things important to you one by one. Let’s begin by discussing ITM.
So, what happens in ITM?
Assume that the current value of Nifty or Bank Nifty, or the price of any stock, is 500. What would happen if you choose its strike price in the option at 500 only, whether in call or put? If we suppose that the market is rising on the call side, what happens if we add CE to 500? It means that there is a market on 500 exclusively, and if we want to buy 500 only, we will be right on the money. It signifies that the strike price you’ve chosen is absolutely where the market is trading right now.
The second thing to remember is that if someone advises you to take in the money, it signifies the market is moving, and the one you want to buy is now at 500. Which already has the price; it refers to values before to 500, right? 450, 460, 470, 80, 90, etc. Similarly, those values are less than 500. Therefore whichever strike price you choose will be profitable.
We’ll have OTM as the third option. We’re talking about the call side here, so as we move forward- keep in mind that we’re talking about moving to the higher side, where the market is at 500 and prepping for 600.
In that case, what will happen if OTM values are above 500 in the future, such as 510, 520, or 530? For example, if the price is above 500, we will refer it as OTM on the call side.
ITM VS ATM VS OTM
Finally, if we compare these two on a trading chart- the significant difference will be that the call in the money changes to put in out of the money option, whereas the put in out of the money becomes a call in the money option. It is a pretty straightforward relationship in Call and Put, and OTM and ATM, and you’ll notice that most of the trades are executed only after relating to ATM, OTM, and ITM. Also, the most crucial part which remains in it is of- in the money and out of the money. How? That will become apparent to you in the following days.
#stockmarkets #nifty #bankNifty #sharemarket #atm #itm #otm
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Open Free Trading account:
Zerodha ►https://zerodha.com/?c=EN1505&s=CONSOLE
Fyers ► https://open-account.fyers.in/?id=XM05620
Telegram ►https://t.me/mytradelogicofficial
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Disclaimer: By creating this channel, we are making one thing clear no information from our videos must be taken as professional advice. We are not any certified financial consultants instead our only aim in creating these videos is for educational purposes by Mukesh Thakur
