out-of-the-money
An option with no value. A call option is out of the money when the strike or exercise price is above the price of the underlying security. Similarly a put option is out of the money when the exercise price is below the price of the underlying security.
Related links
USA
Reflecting a balance owed (though not necessarily due) from one party to another. Commonly used in a variety of contexts. In swaps and derivatives, a trade is, or a group of trades are, described as being out of the money to the party that has accrued a negative net balance.
For example, parties to an ISDA agreement do not typically settle their trades on a daily or even weekly or monthly basis. Rather, the parties run debit and credit balances with one another (usually backed by the daily or weekly exchange of collateral). When the aggregate value of all trade positions under a particular trade or group of trades is negative for a party, that party is said to be out of the money on that trade or group of trades.
This term is also commonly used in the context of options. In a situation where the exercise or strike price for an option is:
• In the case of a call option, above the market price of the asset or commodity underlying the option, which would not permit the party exercising the call option to buy the underlying asset or commodity at a lower price and sell it at the (higher) market price for a profit, such option is out of the money to that party.
• In the case of a put option, below the market price of the asset or commodity underlying the option, which would not permit the party exercising the put option to sell the underlying asset or commodity at a higher price and buy it at the (lower) market price for a profit, such option is out of the money to that party.
Related terms
in the money

Practical Law Dictionary. Glossary of UK, US and international legal terms. . 2010.

Look at other dictionaries:

  • Out of the question — Out Out (out), adv. [OE. out, ut, oute, ute, AS. [=u]t, and [=u]te, [=u]tan, fr. [=u]t; akin to D. uit, OS. [=u]t, G. aus, OHG. [=u]z, Icel. [=u]t, Sw. ut, Dan. ud, Goth. ut, Skr. ud. [root]198. Cf. {About}, {But}, prep., {Carouse}, {Utter}, a.]… …   The Collaborative International Dictionary of English

  • Out of the way — Out Out (out), adv. [OE. out, ut, oute, ute, AS. [=u]t, and [=u]te, [=u]tan, fr. [=u]t; akin to D. uit, OS. [=u]t, G. aus, OHG. [=u]z, Icel. [=u]t, Sw. ut, Dan. ud, Goth. ut, Skr. ud. [root]198. Cf. {About}, {But}, prep., {Carouse}, {Utter}, a.]… …   The Collaborative International Dictionary of English

  • Out of the woods — Out Out (out), adv. [OE. out, ut, oute, ute, AS. [=u]t, and [=u]te, [=u]tan, fr. [=u]t; akin to D. uit, OS. [=u]t, G. aus, OHG. [=u]z, Icel. [=u]t, Sw. ut, Dan. ud, Goth. ut, Skr. ud. [root]198. Cf. {About}, {But}, prep., {Carouse}, {Utter}, a.]… …   The Collaborative International Dictionary of English

  • The Money Well — is a Scrooge McDuck comic strip story written by Carl Barks. Storyline Scrooge and his nephews are at his Money Bin where they find out that The Beagle Boys are using oil rigs to steal Scrooge s Money. Scrooge and his nephews use the secret… …   Wikipedia

  • The Money Maze — Format Game show Created by Don Lipp Ron Greenberg Directed by Arthur Forrest Presented by Nick Clooney Narr …   Wikipedia

  • The Money Game II: Kabutochou no Kiseki — cover art Developer(s) SOFEL[1] …   Wikipedia

  • The Money-Maker Recipe — 師奶股神 The Money Maker Recipe poster Genre Modern Drama Starring Kiki Sheung Michael Tse …   Wikipedia

  • Out for the Cash — Single by DJ Honda featuring Al Tariq, The Beatnuts, Fat Joe and Problemz from the album DJ Honda …   Wikipedia

  • Out of the Dust —   First edition cover …   Wikipedia

  • Out of the Fog (film) — Out of the Fog Theatrical release poster Directed by Anatole Litvak Produced by …   Wikipedia

  • Out of the Cellar — Studio album by Ratt Released March 27, 1984 Recorded 1983 84 …   Wikipedia

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”

We are using cookies for the best presentation of our site. Continuing to use this site, you agree with this.