What It Means
Moneyness is where an option's strike price sits relative to the underlying's current spot price. Every strike on an option chain falls into one of three moneyness buckets: in the money, at the money, or out of the money.
How It Works
The rule flips depending on whether you're looking at a call or a put.
| Option type | In the Money | At the Money | Out of the Money |
|---|---|---|---|
| Call | Strike below spot | Strike ≈ spot | Strike above spot |
| Put | Strike above spot | Strike ≈ spot | Strike below spot |
A single spot price can make a call ITM while the put at that exact same strike is OTM, and the reverse. The two are mirror images of each other, not independent classifications.