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The American Heritage Dictionary of Business Terms » out-of-the-money
out-of-the-money
out-of-the-money definition - business
out-of-the-money
Used to describe a call option with a strike price above the price of the underlying asset, or a put option with a strike price below the price of the underlying asset. For example, a put option to sell 100 shares of Cisco Systems stock at $50 per share is out-of-the-money if the stock currently trades at $70. Even though an out-of-the-money option has no intrinsic value, it may have market value. Compare at-the-money. See also in-the-money.
The American Heritage® Dictionary of Business Terms Copyright © 2009 by Houghton Mifflin Harcourt Publishing Company. Published by Houghton Mifflin Harcourt Publishing Company. All rights reserved.
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