An option is 'out of the money' in two different scenarios: First, a call option is out of the money when the contract has a strike price higher than the current market price of the underlying stock. Second, an Out of The Money put has a strike lower than the current market price of the underlying stock. An Out of the money option's premium has no intrinsic value and therefore the premium consists exclusively of time value.
Same Terms Found in OptionAutomator’s Content:
An option is 'out of the money' in two different scenarios: First, a call option is out of the money when the contract has a strike price higher than the current market price of the underlying stock. Second, an Out of The Money put has a strike lower than the current market price of the underlying stock. An Out of the money option's premium has no intrinsic value and therefore the premium consists exclusively of time value.
Same Terms Found in OptionAutomator’s Content: