Out of the Money (OTM)

May 25, 2021

“Out of the money” (OTM) is an expression used to describe an option contract that only contains extrinsic value. These options will have a delta of less than 50.0.

An OTM call option will have a strike price that is higher than the market price of the underlying asset. Alternatively, an OTM put option has a strike price that is lower than the market price of the underlying asset.