"In the money" is a term that is used in several different ways, depending on the type of financial application under discussion. One of the more common uses of the expression has to do with identifying a situation in which the strike price of a call option is currently lower than the market price of the asset that is underlying the option. The term can also refer to a situation in which the strike price of a put option is currently above the market price of that underlying asset. In a more general setting, in the money refers to any situation in which an individual or entity is enjoying a period of significant prosperity, and has more than enough cash on hand to live comfortably.
"In the money" is only one term that may apply to the current relationship between the value of the underlying asset and the strike price of the call or put option. When the two are more or less the same, the option may be said to be at the money. When there is a significant amount of difference that is to the advantage of the investor, the option can be said to be deep in the money. Should the relationship between the strike price and the value of the underlying asset be unfavorable, this means that the option is out of the money, and is not currently positioned to result in profits for the investor.
When an investor is in the money with a put or call option, the expression does not mean that there are any guarantees regarding the eventual profitability of that investment. Instead, the term simply means that as of the current date and time, the strike price of that option is favorable for the possible future generation of some type of return on the investment. Any number of events may occur that would alter the situation at some point, necessitating additional actions on the part of the investor to protect his or her interests.
One of the easiest ways to understand what is meant by "in the money" is to consider an investor who buys a call option on shares of stock at a strike price of $20 US dollars per share. If that same stock currently has a price of $25 USD per share, this means the investor could conceivable exercise the call, then immediately sell those share and realize a return for his or her efforts. That $5 USD per share would constitute being in the money, even allowing for any fees or costs associated with creating and executing the call. Depending on the number of shares, the total amount of profit generated by this approach could be quite significant.