In The Money (ITM) Put Options
A put option is in the money when the price of the underlying security is below that of a set limit. The put option is in-the-money because the holder has the right to sell the underlying security for more than its current price. When you can sell the underlying security at a price higher than its strike price, you have the right to do so and its value is at least the difference between the sale & current market prices.
For this reason, an ITM put option is when the strike price is above the current market price. For example, if you're an investor who has a ITM put in their portfolio at the time of expiration, The stock is trading below the strike price, so it may be a good time to exercise the option. If you buy a put option, then you are hoping the price of the stock will drop below the price set by the strike. It’s possible that you could make money if this happens. By buying a put option, you're betting on an uncertain event (the future price).
The difference between the strike price and current underlying security's price (intrinsic value) is something a put option needs for it to be worth anything.
