Definition: Out Of The Money Option (OTM) | Tackle Trading: The #1 rated trading education platform

Out Of The Money Option (OTM)

An Out-of-the-Money option is an option contract that is not worth exercising at the strike price. Any call with a strike price higher than the current price of the underlying security is out-of-the-money while any put with a strike price lower than the current price of the underlying security is out-of-the-money. Out-of-the-money options carry no intrinsic value and have lower deltas than in-the-money-options.

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