6. Moneyness of option 

In the previous video, we summarized all that we have learned about call options and put options. We also ended the video with the following questions:
1. Who sets the premium?
2. Which strike price to trade?
3. What are factors that influence premiums?
In this video, we discuss the concept of moneyness of an option which will help us answer these questions. Moneyness tells you whether you'll make money or lose money if you were to excerise the option. These are 3 classifications of moneyness:
1. In the Money (ITM)
2. At the Money (ATM)
3. Out of the Money (OTM)
These classifications will help you understand whether you'll make or lose money. In this video, we understand all these 3 terms.
Learn more about monyeness here: zerodha.com/varsity/chapter/m...