Derivatives
Out of the Money
Definition
What is Out of the Money?
An option with no current intrinsic valueAn estimate of an asset's underlying economic worth based on expected cash flows, assets, or earning power..
Example in practice
How This Looks in Practice
A ₦60-strike call is out of the money when the share trades at ₦50.
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Related Terms
Derivatives
Derivative
A contract whose value depends on an underlying asset, rate, index, or event.
DerivativesUnderlying Asset
The asset, rate, index, or reference on which a derivative's value is based.
DerivativesNotional Amount
The reference amount used to calculate derivative payments, which may exceed the cash initially exchanged.
Derivatives StrategiesCovered Call
A strategy that owns the underlying asset and sells call options against it.