When an option is at the money, the price that the option is betting on is the same as the underlying price.  Depending on which side of the price the option lands on when it expires, this is the difference of ending up either with some value or no value at all.  If the price begins moving so that it is on track to end up with zero value, then it has drifted from at-the-money to out-of-the-money. And if the price moves so that the option becomes on track to end up with some value, then it has become in-the-money.

An ITM (in the money) option always has some intrinsic value. Intrinsic value is a guaranteed part of the option’s price, depending entirely on whether the underlying security’s price is beating the strike price (the target price which the option is based on).The intrinsic value of an ITM option stands regardless of time remaining or implied volatility (a demand-related premium for that option). One quick way to confirm if an option is ITM is to check that its delta (measure of directional risk) is significantly greater than 50. 

An option is out-of-the-money if it would have zero value expiring with the underlying at its current price. When an option is out-of-the-money, its entire price is made of extrinsic value, which is a premium that option buyers are willing to pay for an opportunity to make a profit.