In the money/ At the money/ Out of the money

If a call option is in the money, its strike price is lower than the underlying price. 

Formula: Underlying – Strike Price = Positive

If a put option is in the money, it means that its strike price is higher than the price of the underlying. 

Formula: Strike Price – Underlying = Positive

If an option is at the money, its strike price and underlying price are pretty much the same. 

If a call option is out of the money, it means its strike price and its underlying price are pretty much the same.

Formula: Underlying – Strike Price = Negative

If a put option is out of the money, it means its strike price is lower than the price of its underlying.

Formula: Strike Price – Underlying = Negative