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Option moneyness is one of the fundamental concepts that every options trader needs to learn. The good news is that it's not too difficult!

Options traders use option "moneyness" to describe how an option's strike price relates to the current stock price.

More specifically, three terms are commonly used:
1. In-the-money
2. At-the-money
3. Out-of-the-money

In this video, we break down each of these three terms with examples, and also show you how to identify these options in a real option chain. tastytrade, Inc. (“tastytrade”) has entered into a Marketing Agreement with Project Finance(Marketing Agent”) whereby tastytrade pays compensation to Marketing Agent to recommend tastytrade’ brokerage services. The existence of this Marketing Agreement should not be deemed as an endorsement or recommendation of Marketing Agent by tastytrade and/or any of its affiliated companies. Neither tastytrade nor any of its affiliated companies is responsible for the privacy practices of Marketing Agent or this website. tastytrade does not warrant the accuracy or content of the products or services offered by Marketing Agent or this website. Marketing Agent is independent and is not an affiliate of tastytrade.