What Does It Mean for an Option to Be Out-of-the-Money (OTM)?
An option is Out-of-the-Money (OTM) if exercising it immediately would result in no intrinsic value. For a call option, OTM means the strike price is above the current underlying asset price.
For a put option, OTM means the strike price is below the current underlying asset price. OTM options only consist of time value and are generally cheaper than ATM or ITM options.
