• CALLS

• PUTS

• Premiums

• Dollar Cost Averaging

• Share Price

• Options

• Strike Price

• Intrinsic Value

• Extrinsic Value

• Bid

• Ask

• In the Money (ITN)

• At The Money (ATM)

• Out of The Money (OTM)

• Days to Expiration (DTE)

• Spread

• Delta

• Gamma

• Theta (Time)

• Vega (Volatility)

• The Wheel

• Cash Secured PUT

AAPL was trading at $163.00

In-the-Money (ITM)

1. ITM options < Current Share Price

2. ITM for CALLS (Left side of Strike, Light grey)

3. ITM for PUTS (Right side of Strike, Light grey)

4. ITM Options are more expensive

   • 150 Strike = 13.20 to 14.05

   • 162.5 Strike = 3.30 to 3.50

   • 170 Strike = 0.45 to 0.47

5. They cost more because they have a greater intrinsic value (see Intrinsic vs Extrinsic value)

At-the-Money (ATM)

1. At the money (ATM) are the closest to the current price of the stock (just outside of the grey)

2. Contracts that expire ATM may or may not be worth anything

   • ATM option > Share Price = In the Money

   • ATM option < Share Price = Worthless

3. While the ATM option at expiration may be ITM, it may not have much intrinsic value (Share Price > Strike). See the examples below.

   • 165 Strike, Share Price of 163, Worthless

   • 162.5 Strike, Share Price of 163, $50 value

   • 155 Strike, Share Price 163, $800 value

Out-the-Money (OTM)

1. OTM options > Current Share Price

2. OTM options are speculative on the stock moving in a direction (up or down based on what you purchase)

3. OTM's are cheaper than ATM or ITM

   • They are cheaper because they are less likely close ITM than options already ITM or ATM.

   • They have no intrinsic value (see Intrinsic vs Extrinsic value)

4. Example

   • 165 Strike = 1.97 to 2.09

   • 170 Strike = 0.45 to 0.47

5. Contracts that expire OTM have zero value

   • 162.5 Strike, Share Price 163, Worthless

   • 162.5 Strike, Share Price 163+, Worthless