In the money: Difference between revisions
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(ITM). | (ITM). | ||
2. A derivative such as a swap is in the money when, for example, the swap rate is favourable compared with the current market rate, so that the net present value of the derivative is positive. | 1. | ||
An option is in the money for the holder when immediate exercise of the option would result in a gain for the option holder. | |||
2. | |||
A derivative such as a swap is in the money when, for example, the swap rate is favourable compared with the current market rate, so that the net present value of the derivative is positive. | |||
== See also == | == See also == | ||
* [[At the money]] | * [[At the money]] | ||
* [[Derivative instrument]] | |||
* [[Exercise]] | |||
* [[Intrinsic value]] | |||
* [[Net present value]] (NPV) | |||
* [[Out of the money]] | * [[Out of the money]] | ||
* [[Strike price]] | |||
* [[Swap]] | |||
[[Category:Manage_risks]] | |||
Latest revision as of 11:41, 14 June 2023
(ITM).
1.
An option is in the money for the holder when immediate exercise of the option would result in a gain for the option holder.
2.
A derivative such as a swap is in the money when, for example, the swap rate is favourable compared with the current market rate, so that the net present value of the derivative is positive.
