Part 1 Ride The Big Moves

American vs. European Options

Options can be American-style or European-style. American options can be exercised any time before expiry, while European options can be exercised only on the expiry date. In India, stock options are American, while index options are European.

In-the-Money, At-the-Money, and Out-of-the-Money

These terms describe an option’s relationship to the current market price:

In-the-Money (ITM): Option has intrinsic value.

At-the-Money (ATM): Strike price equals the current price.

Out-of-the-Money (OTM): Option has no intrinsic value yet.