An option is considered In-the-Money (ITM) when exercising it would lead to a profit, based on the current market price of the underlying asset.
A call option is ITM when the underlying asset’s market price is above the strike price. For example, if the stock is trading at $60 and the strike price is $50, the call option is $10 in-the-money.
A put option is ITM when the underlying asset’s market price is below the strike price. For example, if the stock is trading at $40 and the strike is $50, the put is $10 in-the-money.
ITM options have intrinsic value and are generally more expensive than out-of-the-money options due to this value.