What Does It Mean for a Put Option to Be “Out-of-the-Money”?

A 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 state, the option has no intrinsic value.

For instance, if Ethereum is trading at $4,000, a put option with a strike price of $3,500 is out-of-the-money. Exercising it would mean using the right to sell Ethereum at $3,500 when it could be sold for $4,000 on the open market, which would be illogical.

OTM options only have extrinsic (time) value.