What Is the Term for an Option That Has No Intrinsic Value? ⎊ Path

What Is the Term for an Option That Has No Intrinsic Value?

An option that has no intrinsic value is referred to as "out-of-the-money" (OTM) or "at-the-money" (ATM). OTM means exercising it immediately would result in a loss.

ATM means the strike price is equal to the underlying price, so the intrinsic value is zero. Both OTM and ATM options have a premium composed entirely of time value (extrinsic value).

In a Straddle Strategy, Why Are ATM Options Typically Chosen?

What Is the Concept of “Skew” in Relation to the Time Value of ATM Vs OTM Options?

What Is Delta and How Does It Relate to an Option Being ITM, OTM, or At-The-Money (ATM)?

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

What Is ‘Out of the Money’ (OTM)?

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Glossar

No Intrinsic Value

Value ⎊ No Intrinsic Value describes an options contract that, if exercised immediately, would yield zero profit for the holder.