|
Definition: Options are said to be out of the money when they can't be exercised. For call options, this occurs when the stock price is below the strike price. For put options, this occurs when the stock price is above the strike price.
StockJargon Advice: Even though an option is out of the money, it doesn't necessarily mean the option is worthless. Because there's a potential the option may eventually be in the money, there's some value in the option.
Out of the money options are also commonly referred to as "under water."
|
|
