What Is ‘Out of the Money’ (OTM)?
An option is 'out of the money' (OTM) when it has no intrinsic value, meaning exercising it immediately would result in a loss. For a call option, OTM means the underlying asset price is below the strike price.
For a put option, OTM means the underlying asset price is above the strike price. OTM options only have extrinsic value, which decays over time.
