out-of-the-money business definition

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.