Frequently Asked Questions
Stock Options
What are the moneyness of options?
ITM: In-the-money options are those options that have intrinsic value if exercise.
- Calls with strikes below where the underlying is currently trading
- eg. Call strike: 100, Current underlying price: 120 (Call < Underlying)
- Puts with strikes above where the underlying is currently trading
- eg. Put strike: 100, Current underlying price: 80 (Put > Underlying)
ATM: At-the-money options are those options that have a strike price closest to where the underlying asset is currently trading at
- Call/Put with strikes roughly the same where the underlying asset is currently trading at
OTM: Out-of-money options are those options that have no intrinsic value if exercise
- Calls with strikes above where the underlying is currently trading at
- eg. Call strike: 120, Current underlying price: 100 (Call > Underlying)
- Puts with strikes below where the underlying is currently trading at
- eg. Put strike: 80, Current underlying price: 100 (Put < Underlying)
Other faq that might help you
- How are options classified?
- How do I make sense of an option symbol?
- What are the Greeks in option trading?
- What are the risks involved in trading options?
- What happens after I’ve entered into an options position?
- Are there any forms required prior to trading Options?
- What are the eligible account types to trade Options?
- How long is the approval process for Option Activation?
- How do I read the Option Portfolio balance?
- Why are Exercise/Assignment activities not shown on the same day of the e-statements?
- What are some of the common reasons for order rejection?
- How do I transfer funds into my Options Account? (Video Guide)
- How do I transfer funds into my Options Account?
- How do I transfer stocks into my Options Account? (Video Guide)
- How do I transfer stocks into my Options Account?
- Why is there a need to transfer funds/stocks prior to trading options?
- Does POEMS support option strategies?
- What are the supported platforms?
- Is there US Pre-market Trading for options?
- What are the tradable counters available for options?
- What happens if the underlying share is delisted onto OTC?
- Glossary
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