This video is about understanding in the money and out of the money options in options trading.
The video explains the concept of in the money and out of the money with calls and puts. A call option gives the buyer the right, but not the obligation, to buy 100 shares of a stock at a certain price (strike price) by a certain time (expiration date). A put option gives the buyer the right, but not the obligation, to sell 100 shares of a stock at a certain price (strike price) by a certain time (expiration date).
A call option is considered in the money if the current stock price is higher than the strike price. This means that if you exercise the option to buy the stock at the strike price and immediately sell it at the current market price, you would make a profit. Conversely, a call option is considered out of the money if the current stock price is lower than the strike price. In this case, exercising the option would result in a loss because you would be buying the stock at a higher price than the current market price.
Similarly, a put option is considered in the money if the current stock price is lower than the strike price. This means that if you exercise the option to sell the stock at the strike price and immediately buy it at the current market price, you would make a profit. Conversely, a put option is considered out of the money if the current stock price is higher than the strike price. In this case, exercising the option would result in a loss because you would be selling the stock at a lower price than the current market price.
