What Does It Mean for an Option to Be ‘Out-of-the-Money’?
An option is 'out-of-the-money' (OTM) if exercising it immediately would result in a financial loss or zero profit. For a call option, this means the strike price is above the current underlying price.
For a put option, the strike price is below the current underlying price. OTM options have zero intrinsic value.
