At What Point Does an OTM Option Become Worthless? ⎊ Path

At What Point Does an OTM Option Become Worthless?

An OTM option becomes worthless if it remains out-of-the-money until its expiration date. At expiration, all time value decays to zero, and since the intrinsic value is already zero for an OTM option, the total value of the contract becomes zero.

The buyer loses the entire premium paid.

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