The phrase "Near The Money" refers to an options contract whose strike price is close to the current market price of the corresponding underlying security. Near-the-money is synonymous with at-the-money. It is very seldom that the underlying asset's price will be exactly at the strike price, but it does happen occasionally. The vast majority of option contracts are near or at the money.There are several reasons why most options contracts are near or at the money. First, when an investor buys an option, they usually have a target price in mind for the underlying security. If that target prices is close to where the security is currently trading, then they will likely buy a near or at the money option so they don't have to pay as much for their position. Second, most investors believe that it's easier for a security to move $1 if it's currently trading right around $100 than if it's trading at $50 or $150 - all other things being equal of course. So again, they will often buy nearer term options because they think it gives them a better chance of success and/or limits their risk exposure compared to buying further out options contracts.
