Home MarketXLS
Dashboard MarketXLS
Screener MarketXLS
Options Profit Calculator MarketXLS
Stock Ranks MarketXLS
Spreadsheet Builder MarketXLS
Documentation MarketXLS
Logout MarketXLS
Option Strategies

ITM Options: A Strategic Investing Tool

Written by admin
Mon Jan 16 2023
ITM Options: A Strategic Investing Tool - MarketXLS
See how MarketXLS helps you take advantage in the markets.
Download Option Template →
ITM Options: A Strategic Investing Tool - MarketXLS

ITM Options: A Strategic Investment Tool

Investing in options trading has the potential to bring big returns when done correctly. ITM options, also known as in-the-money options, enable investors to speculate on the future direction of a security’s price, utilizing the leverage of contracts to maximize their profits. This article explains ITM options, their benefits, strategies and risk management tactics so investors can decide if these options are suitable for their investment goals.

What are ITM Options?

ITM options are call or put options with a strike price lower than the underlying security’s market price. Buying an ITM call option allows investors to purchase a security at a lower price than the market price and benefit from potential appreciation while a put option grants them the ability to sell a security at a higher price than the market price. ITM options offer greater flexibility as they can be used for speculation as well as hedging and income generation.

Benefits of Investing in ITM Options

Buying ITM options comes with a higher potential of profitability, especially when the security’s price moves in the predicted direction significantly. Depending on the strategy and terms of the option, ITM options also enable investors to earn higher returns for short-term strategies and lower risk than buying or selling a stock.

ITM Options Strategies

Multiple strategies can be employed when trading ITM options, such as short guts, long guts, buy-write, and margin trading. The short guts strategy involves buying and selling a call option at the same time, as elaborated upon in this article. This can benefit investors in volatile markets, where they can make a return without needing to wait for the security to reach a certain price level. Likewise, the long guts strategy can be used to cap the maximum achievable loss and protect investors from unpredicted price swings.

Risk Management

Options traders should always bear in mind that investing in options carries more risk than investing in stocks, regardless if they’re ITM options or any other type of options. Investors should ensure they understand how options work and how they should be priced before investing. Risk management is also critical, especially in volatile markets or when trading with high leverage. Investors need to consider the cost of the investment, the amount of time the option will be active and the level of liquidity available to help reduce risk and maximize returns.

MarketXLS and How it Can Help

MarketXLS is an investment analysis and research tool that empowers investors with the data and insights they need to make the smarter investment decisions. It tracks real-time data, historical data, fundamental and technical analysis data of the popular stocks and ETFs, such as the SPY (SPDR S&P 500 Trust ETF), for example. With MarketXLS investors can save time, keep up with the markets and make smarter investment decisions.

In conclusion, ITM options offer some advantages for investors who understand the risks and manage them accordingly. ITM options can be a strategic tool in an investor’s portfolio and MarketXLS can provide the necessary data and insights to maximize the potential of the options trading market.

Here are some templates that you can use to create your own models

Bear Put Spread Option Strategy
Call Backspread Option Strategy
Bull Put Spread Option Strategy
Bear Call Spread Option Strategy
Short Condor Spread
Laddered Call
Put Ratio Back-Spread
Call Condor Spread

Search for all Templates here: https://marketxls.com/templates/

Relevant blogs that you can read to learn more about the topic

Bull Put Options Strategy
Options Trading (Strategies)
Trading In Bull Put Spread Options Strategy (Using Excel)
Trading In Bear Call Spread Options Strategy (Using Excel)
Short Strangle Option Strategy

Interested in building, analyzing and managing Portfolios in Excel?
Download our Free Portfolio Template
I agree to the MarketXLS Terms and Conditions
Call: 1-877-778-8358
Ankur Mohan MarketXLS
I am so happy you are here. My name is Ankur and I am the founder/CEO of MarketXLS. Over the past four years, I have helped more than 2500 customers to implement their own investment research strategies and monitoring systems in Excel.
Implement “your own” investment strategies in Excel with thousands of MarketXLS functions and starter sheets.
Get started today
Search for a stock

Get Access to 1 Billion Usable Market data points IN YOUR EXCEL SHEETS WITH EASY TO USE EXCEL FUNCTIONS

Get started today

Top MarketXLS Rank stocks

Williams-Sonoma Inc. (DE) logo

Williams-Sonoma Inc. (DE)

139.46
 
USD
 
4.52
 
(3.35%)
89
Rank
Optionable: Yes
Market Cap: 8,983 M
Industry: Specialty Retail
52 week range    
101.58   
   176.89
Rush Enterprises Inc. Class A Common Stock logo

Rush Enterprises Inc. Class A Common Stock

55.74
 
USD
 
1.93
 
(3.59%)
88
Rank
Optionable: Yes
Market Cap: 2,929 M
Industry: Auto & Truck Dealerships
52 week range    
42.72   
   56.01
Haverty Furniture Companies Inc. logo

Haverty Furniture Companies Inc.

35.01
 
USD
 
0.09
 
(0.26%)
88
Rank
Optionable: Yes
Market Cap: 564 M
Industry: Home Improvement Stores
52 week range    
22.77   
   35.40
PulteGroup Inc. logo

PulteGroup Inc.

58.44
 
USD
 
1.55
 
(2.72%)
87
Rank
Optionable: Yes
Market Cap: 12,961 M
Industry: Residential Construction
52 week range    
35.03   
   58.65
Toll Brothers Inc. logo

Toll Brothers Inc.

60.26
 
USD
 
0.77
 
(1.29%)
86
Rank
Optionable: Yes
Market Cap: 6,578 M
Industry: Residential Construction
52 week range    
39.53   
   63.19
Weis Markets Inc. logo

Weis Markets Inc.

86.71
 
USD
 
0.37
 
(0.43%)
85
Rank
Optionable: Yes
Market Cap: 2,322 M
Industry: Grocery Stores
52 week range    
58.40   
   95.57
Victory Capital Holdings Inc. logo

Victory Capital Holdings Inc.

30.34
 
USD
 
0.70
 
(2.36%)
85
Rank
Optionable: Yes
Market Cap: 2,030 M
Industry: Asset Management
52 week range    
22.22   
   36.90
Regional Management Corp. logo

Regional Management Corp.

35.98
 
USD
 
1.49
 
(4.32%)
85
Rank
Optionable: Yes
Market Cap: 331 M
Industry: Credit Services
52 week range    
26.52   
   56.95
Penske Automotive Group Inc. logo

Penske Automotive Group Inc.

130.72
 
USD
 
2.90
 
(2.27%)
85
Rank
Optionable: Yes
Market Cap: 9,114 M
Industry: Auto & Truck Dealerships
52 week range    
88.58   
   131.67
El Pollo Loco Holdings Inc. logo

El Pollo Loco Holdings Inc.

12.22
 
USD
 
-0.05
 
(-0.41%)
85
Rank
Optionable: Yes
Market Cap: 455 M
Industry: Restaurants
52 week range    
8.15   
   13.97

More Features