What Is 'Out of the Money' (OTM)? ⎊ Path

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.

What Does It Mean for an Option to Be “Out-of-the-Money” (OTM)?

Explain the Concept of ‘In-the-Money’ for Both Call and Put Options

What Is an ‘Out-of-the-Money’ (OTM) Option?

What Is the Definition of an “Out of the Money” (OTM) Option?

What Is “In the Money” for a Call Option versus a Put Option?

Define ‘In-the-Money’ (ITM) for Both Call and Put Cryptocurrency Options

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

Define “In-the-Money” and “Out-of-the-Money” for a Call Option

Glossar

OTM Options

Option ⎊ An options contract, within the cryptocurrency derivatives space, represents a financial agreement granting the holder the right, but not the obligation, to buy (call option) or sell (put option) an underlying asset ⎊ typically a cryptocurrency or token ⎊ at a predetermined price (the strike price) on or before a specific date (the expiration date).

Underlying Asset Price

Valuation ⎊ The underlying asset price in cryptocurrency derivatives represents the current market consensus of an asset’s worth, serving as the foundational input for pricing options and futures contracts.