out of the money

out of the money
The situation where an option has only time value as opposed to intrinsic value because of the relationship between the option's strike price and the current market price for the underlying instrument, the spot price. A call option is out of the money when the strike price is above the spot price. A put option is out of the money when the strike price is below the spot price. American Banker Glossary
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A warrant with an exercise price above (for a call warrant) or below (for a put warrant) the price of the underlying security. NYSE Euronext Glossary

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   An option is described as being out of the money when the current price of the underlying instrument is below the strike or exercise price for a call (an option to buy), and above the strike price for a put (an option to sell). Options can also be described as being deep out of the money when they are likely to expire out of the money.
   ► See also In the Money, At the Money, Option.

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out of the money
FINANCE options are out of the money when they would make a loss if they were used to buy or sell shares: »

With the shares currently trading at $50.53, however, these calls are out of the money.

Main Entry: money

Financial and business terms. 2012.

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Look at other dictionaries:

  • out of the money — An option with no value. A call option is out of the money when the strike or exercise price is above the price of the underlying security. Similarly a put option is out of the money when the exercise price is below the price of the underlying… …   Law dictionary

  • out-of-the-money — An option with no value. A call option is out of the money when the strike or exercise price is above the price of the underlying security. Similarly a put option is out of the money when the exercise price is below the price of the underlying… …   Law dictionary

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