Out-of-the-money option

A call option is out-of-the-money if the strike price is greater than the market price of the underlying security. A put option is out-of-the-money if the strike price is less than the market price of the underlying security. The New York Times Financial Glossary

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out-of-the-money option UK US noun [C]
STOCK MARKET an option (= right to buy or sell shares, etc.) which has no value because the shares, etc. can be only be bought for above their present price, or sold for less than their present price: »

The best time to buy an out-of-the-money option is when you expect market volatility to increase.

Compare AT-THE-MONEY OPTION(Cf. ↑at-the-money option), IN-THE-MONEY OPTION(Cf. ↑in-the-money option)

Financial and business terms. 2012.

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