On the surface, all options look the same. You choose a strike, pick a date, and place a trade. But beneath that simple exterior, two very different beasts are hiding: in-the-money (ITM) and out-of-the-money (OTM) options.

So, why do they behave so differently?

The key difference lies in intrinsic value.

An ITM option already has value built in — the stock price has already moved past the strike. You’re paying more upfront, but you’re also getting a contract that reacts more directly to stock movement. It's closer to owning the stock itself.

OTM options, on the other hand, are cheaper for a reason. They don’t have any intrinsic value — their worth comes from potential. Traders buy them hoping the stock will make a significant move. But if that move doesn’t come quickly, time decay (theta) will chip away at their value fast.

In short:

• ITM = more expensive, more stable, more responsive
• OTM = less expensive, more volatile, more risk

Choosing between ITM and OTM isn’t just about cost — it’s about strategy. Risk tolerance. Time horizon. Market conditions.

If you’ve been puzzled by how one option pops while another fizzles, even on the same stock, understanding this difference is a critical step forward.

Most traders jump into options without knowing how they work. SlingShot Trader changes that.

‍Inside, you’ll learn to read the setups, pick the strikes, and time your entries like a pro — without the noise and guessing games.

Start with clarity. Trade with purpose.

→ Get started with SlingShot Trader today.