First, let us see the full abbreviations of ITM, ATM, and OTM.

ITM – In the Money

ATM – At the Money

OTM – Out of the Money

Now, let us understand the above factors based on the example.

Let us consider the Nifty is trading at 17000.

Now, 17000 Call & Put options become In the Money options

All the call options below 17000 (16950, 16900, etc.,) become in the money (ITM) Call options.

All the put options below 17000 (16950, 16900, etc.,) become out of the money (OTM) Put options.

All the call options above 17000 (17050, 17100, etc.,) become Out of the Money (OTM) Call options.

All the put options above 17000 (17050, 17100, etc.,) become In the money (ITM) Put options.