What is the definition of in the money in stock option trading?

In the money is a trading term referring to the value of options. If an option is said to be 'in the money', then it has value. In the money does not mean you have made a profit yet because the profit has not been realized. However, it does mean that selling the option will give you profit.

For options:

• A call option is in the money when the strike price is below the market price of the asset
• A put option is in the money when the strike price is above the market price of the asset