IN-THE-MONEY (ITM) - Term used when the strike price of an option is less than the price of the underlying fora call option, or greater than the price of the underlying fora put option. In other words, the option has an intrinsic value greater than zero.
INTRINSIC VALUE - Amount of any favorable difference between the strike price of an option and the current price of the underlying (i.e., the amount by which it is in- the-money). The intrinsic value of an out-of-the-money option is zero.
LAST TRADING DAY - The last business day prior to the option’s expiration during which purchases and sales of options can be made. For equity options, this is generally the third Friday of the expiration month.
LEAPS - Long-term Equity Anticipation Securities, also known as long-dated options. Calls and puts with expiration as long as 2-5 years. Only about 10% of equities have LEAPS. Currently, equity LEAPS have two series at anytime, always with January expirations. Some indexes also have LEAPS.
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