Beginning Traders

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Out-Of-The-Money

This is a term that describes the moneyess of an option. A call option is out-of-the-money when the strike price is above the current trading price of the underlying security. A put option is out-of-the-money when the strike price is below the current trading price of the underlying security. An out-of-the-money (OTM) option has no intrinsic value.


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