In the Money
An option that would have positive value if exercised immediately.
How it is identified
Call: Spot > Strike; Put: Spot < Strike
Unit
qualitative
In depth
In-the-money options carry intrinsic value, so they cost more and move more closely with the underlying — their delta is above 0.5 and approaches 1 as they go deeper. Being in the money is not the same as being profitable: an option bought for 300 that is worth 200 at expiry is in the money and has still lost the buyer 100 points. In India, in-the-money single-stock options left open at expiry are physically settled, which means the holder must take or give delivery and needs the funds or shares to do so. Deep in-the-money options are often illiquid, so the theoretical value and the tradable price can diverge considerably.
Worked example
A 24,000 call with the index at 24,200 is in the money by 200 points. Bought at 300, it is worth 200 at expiry — in the money, and a ₹7,500 loss on a lot of 75.
Illustrative figures, chosen so the arithmetic is easy to follow. Not a live price and not a valuation of any company.
Educational reference only
This entry explains what “In the Money” means. It is not investment advice and not a recommendation to buy or sell any security. Any numbers above are illustrative, not live prices, and nothing here predicts price direction or rates a stock. Consider your own circumstances and consult a SEBI-registered investment adviser before acting.