A call option is where the strike price is lower than the current price of the stock is considered to be in the money. The option has intrinsic value because the holder of that option can buy the stock for less than they could in the open market. For instance, a call option with a $50 strike price would be in the money if the stock were trading at $55. A put option where the strike price is higher than the current price of the stock is said to be in the money. The option has intrinsic value because the holder of that stock option can exercise their right to sell the stock and a higher price than they could in the open market. A put option with a strike price of $60 would be five dollars in the money if the stock were trading at $55.

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