You buy an in the money call expecting a rally. The stock moves exactly where you wanted. And somehow your percentage gain is lower than if you had bought the cheaper out of the money option instead. Here is why: when an option moves from out of the money to at the money, you gain extrinsic value. When it moves from at the money to in the money, you gain intrinsic but lose extrinsic. The net percentage change is lower. Mike Butler explains this live on SPY in under 90 seconds. Watch the full Options in Action episode for the complete ITM vs OTM spread strategy breakdown. #optionsinaction #optionstrading #optionsforbeginners #howtotradeoptions #intrinsicvalue #extrinsicvalue #optionsexplained #buyingoptions #optionsstrategy #tastylive tastylive is a real financial network, producing hours of live programming every day. Follow along as our experts navigate the markets, provide actionable trading insights, and teach you how to trade. With over 120 original segments, and over 25 persona...