Out of the Money
An options contract is out of the money if it is in a loss regardless of its direction. For example, a Call contract is out of the money if the price of the underlying security is lower than the options contract's strike price. Conversely, a Put contract is out of the money if the price of the underlying security is higher than the options contract's strike price.
Notes and references
- http://daytrading.about.com/od/daytradingglossary/g/OptionsInOut.htm
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