Dairy Futures and Options Tutorial

Relationship Between Options Strike Price and Futures Contract Price

Brokers often refer to a particular option as being in-the-money, at-the-money, or out-of-the-money. An option is in-the-money if there is positive intrinsic value, at-the-money when the strike price equals the current settle price and out-of-the money if there is no immediate gain from exercising the option (e.g., strike price less than settle price for a put option or strike price greater than settle price for a call option). Below is an example of how you can categorize an option:

Suppose you want to purchase a at a strike price of $

In-the-money 0.00
At-the-money 0.00
Out-of-the-money 0.00