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What does 'out of the money' mean?
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What is out of the money (OTM)?
Jun 15, 2024 · Out of the money is also known as OTM, meaning an option has no intrinsic value, only extrinsic value. A call option is OTM if the underlying price is trading below the strike price of the call.
May 18, 2024 · Traders define options as "in the money" (ITM) or "out of the money" (OTM) by the strike price's position relative to the market value of the underlying stock, commonly called its...
- Christina Majaski
When trading options, it's important to understand the difference between in the money vs. out of the money. Learn what they mean and why they matter.
Dec 29, 2023 · What Is Out Of The Money (OTM) Options? Out of the Money (OTM) options refer to a scenario in options trading where the current market price of the underlying asset is less favorable than the strike price of the option.
Out of the money (OTM) is one of three terms used to address an option’s ‘moneyness’, with the other two being at the money and in the money. An out of the money options contract has not yet reached the value of its strike price, meaning it has no intrinsic value and will expire worthless.
Jun 14, 2024 · What is “out of the money” (OTM)? An option that is out of the money or OTM has no intrinsic value. Again, this is determined by whether it is a put option or a call option. In terms of call options, the option is out of the money if the asset’s underlying price is below its strike price.
Oct 1, 2019 · What is Out of the Money (OTM)? 'Out of the money ' describes an option that is worthless if exercised today. In the case of a call option, the option has no intrinsic value because the current price of the underlying stock is less than the option strike price.
