# Is Touching the same thing as At The Money?

Zvi Bodie, Alex Kane, Alan J. Marcus's Investments (2018 11 edn). p 659.

An option is described as in the money when its exercise would produce a positive cash flow. Therefore, a call option is in the money when the asset price is greater than the exercise price, and a put option is in the money when the asset price is less than the exercise price. Conversely, a call is out of the money when the asset price is less than the exercise price; no one would exercise the right to purchase for the strike price an asset worth less than that amount. A put option is out of the money when the exercise price is less than the asset price. Options are at the money when the exercise price and asset price are equal.

Once the stock price touches the option's strike price, then the option becomes at the money. I can't find this term "Touch" in Bodie or Hull's Options, Futures, and Other Derivatives (2017 10 edn).

Probability of Touch Explained

## Probability of Touch (POT)

Probability of touch is a measurement that gives us a rough idea of the probability of our strike being touched, or breached, by the stock price anytime during the trade’s lifetime. We have found that probability of touch works out to be around two times the probability of the option expiring in the money.

Options Trading Probabilities Explained - POP vs ITM vs OTM vs P50 vs Touch... | Trade Options With Me

The probability of touch shows the probability that the price of the underlying will touch (or breach) the strike price.

Usually, the probability of breach is about 2x the probability of ITM.