Education Series on Derivative Contracts
In the Money:
A contract is in the money when the contract is in favour of the
buyer, that is a profit could be made by trading or exercising his
In fact, it depends on the difference between the strike price and the
exercise value and hence will differ in the case of call option and
A call option is in the money when the settlement value of the asset
is higher than the strike price.
A put option will be in the money when the settlement value is lower
than the strike price.