ATM, ITM, and OTM are terms used in options trading to describe the relationship between the current price of the underlying asset and the strike price of the option. ATM refers to when the two are equal, ITM when the current price is favourable for the option holder, and OTM when it's not. ITM options have intrinsic value and could be exercised profitably, while OTM options have no intrinsic value and wouldn't be profitable if exercised immediately. Understanding these terms is crucial for options traders to evaluate potential profitability and risk.