"In the money" (ITM) is an expression that refers to an option that possesses intrinsic value. ITM thus indicates that an option has value in a strike price that is favorable in comparison to the prevailing market price of the underlying asset:

An in-the-money call option means the option holder has the opportunity to buy the security below its current market price.

An in-the-money put option means the option holder can sell the security above its current market price.

An option that is ITM does not necessarily mean the trader is making a profit on the trade. The expense of buying the option and any commission fees must also be considered. In-the-money options may be contrasted with out of the money (OTM) options.