In the money (ITM)
An option is in the money when exercising it would be worth something today. A call is in the money when the stock trades above the strike, a put when it trades below.
In depth
Buy a 100 strike call while the stock sits at 105 and the option holds 5 dollars of built-in value. That 5 dollars is real and does not decay. Anything you pay above it is time value, and that part does decay every day.
Because part of the price is real value, an in-the-money call tracks the stock more closely. The stock moves a dollar and the option moves most of a dollar, where a far out-of-the-money call might move ten cents. You pay more up front for that, and it is easier to sell later, because other traders want it.
Why it matters
Buying the cheapest strike is a common way to be right about direction and still lose. An out-of-the-money call is mostly time value, so the stock has to move far and fast. An in-the-money call costs more but needs a smaller move to pay, which is often the honest version of the trade.
TraderLog imports your options fills from Schwab and IBKR and the calendar shows each day's result. Tag your trades by strike choice and the By tag table compares them, so cheap out-of-the-money buys sit beside in-the-money ones with real numbers attached.
Frequently asked questions
It decays slower and tracks the stock more closely, but it costs more, so a wrong call loses more dollars.
Far enough that most of the price is real value rather than time value. The move you expect decides the rest.
Keep your In the money (ITM) trades on the record in TraderLog
Trades import from Schwab and IBKR on their own, every day lands on a calendar with its P&L, and the day's entry sits beside it. Replay any trade on a TradingView chart. Free for 14 days, no card.
Every trading morning at 8:40 ET our model draws the SPY, QQQ and IWM zones it expects to matter, on a TradingView chart, before the open. Where price reaches one, it has turned 74 percent of the time. Free, no account. See today's map