Explain the Concept of Being “Out of the Money” for a Put Option

A crypto put option is "out of the money" (OTM) when the current market price of the underlying cryptocurrency is higher than the option's strike price. In this scenario, exercising the right to sell at the lower strike price would result in a loss compared to selling at the current higher market price.

An OTM option has no intrinsic value. It only has time value, and its value is entirely based on the hope of a price drop before expiration.