When Is a Put Option Considered ‘Out-of-the-Money’ (OTM)?
A put option is considered 'out-of-the-money' (OTM) when the underlying asset's current market price is higher than the option's strike price. If the option were exercised immediately, the holder would lose money.
An OTM option has no intrinsic value, and its entire premium consists only of extrinsic (time and volatility) value.
