Meant of terminology in- at- out-of-the-money

Question

What is meant through the terminology that an option is in-, at-, or out-of-the-money?

A call (put) alternative with S_t > E (E > S_t) is referred to as trading in-the-money. If S_t ≅ E the option is trading at-the-money. If S_t < E (E < S_t) the call (put) option is trading out-of-the-money.