> For the complete documentation index, see [llms.txt](https://fireup-finance.gitbook.io/fireup.finance/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://fireup-finance.gitbook.io/fireup.finance/+-features/options-101.md).

# Options 101

This topic covers the basis concepts of Options trading:

* [Call & Put Option Buying](#call-and-put-buying) 
* [ITM, ATM, OTM](#itm-atm-otm)

## Call & Put Buying

As a Call option buyer, that gives you the right to buy an underlying asset or instrument at a set price (strike price), on or before a certain date (expiration date). For that right, you give the option writer (or seller) a premium. As a call buyer, you expect the underlying asset to raise past the strike price and the premium paid. Your maximum lost is the cost of the option with an unlimited upside potential.

As a Put option buyer, that gives you the right to sell an underlying asset at the strike price on or before the expiration date. For that right, you give the option writer (or seller) a premium.

## ITM, ATM, OTM

<table><thead><tr><th width="269"> </th><th>Call Option</th><th>Put Option</th></tr></thead><tbody><tr><td>ITM: In the money</td><td>Strike &#x3C; Asset price</td><td>Strike > Asset price</td></tr><tr><td>ATM: At the money</td><td>Strike = Asset price</td><td>Strike = Asset price</td></tr><tr><td>OTM: Out of the money</td><td>Strike > Asset price</td><td>Strike &#x3C; Asset price</td></tr></tbody></table>

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Moneyness is the intrinsic value of an option at any point in time, relative to the price of the underlying asset. For Up/Down options, the moneyness at settlement is the important factor for determining option payouts.

Only ITM options have a positive intrinsic value at settlement, so only ITM options are exercised for profit gains.