out of the money
"Out of the money" is a financial term used in options trading to describe contracts that would not result in a profit if exercised at the current market price.
🇺🇸 US Voice:
🇬🇧 UK Voice:
Definition
C1Options Trading
(technical)Describes an option where the strike price is not favorable compared to the current market price of the underlying asset.
Example
- A call option with a strike price of $60 is out of the money if the underlying stock is trading at $50.
- The put option is out of the money since its strike price is $40, but the stock is trading at $50.
C1General Finance
(technical)An option that would result in a loss if exercised immediately.
Example
- Traders often buy out-of-the-money options for their lower cost and higher potential returns.
- If the market doesn't move in your favor, out-of-the-money options will expire worthless.
Similar
Terms that have similar or relatively close meanings to "out of the money":
in the moneyout of pocketout of itprice out of the marketout of boundsout of workout ofout of the picturelose outout of reachnot outdead moneydown and outout of stockout of questionout of touchout of frameoff target