In the Money (ITM)

An in-the-money (ITM) option has intrinsic value, meaning immediate exercise would result in a positive payoff. A call option is ITM when the underlying asset's price is above the strike price, and a put option is ITM when the underlying is below the strike price. The amount by which an option is in the money equals its intrinsic value. ITM options have deltas greater than 0.50 (calls) or less than -0.50 (puts) and higher probability of expiring with value. They are more expensive than ATM or OTM options because they contain intrinsic value plus time value. Deep ITM options (far above/below the strike) behave almost like the underlying stock itself, with deltas approaching 1.0 or -1.0. ITM options are most likely to be exercised or assigned, especially near expiration or around ex-dividend dates.