Definition of out of the money

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TeachMeFinance.com - explain out of the money



out of the money -- the situation in which the fixed price of an option turns out to be a less favorable price than that currently available in the market, resulting in a loss for the investor. The holder of an option to sell a security is out of the money when the option price is lower than the market price. Conversely, the holder of an option to buy is out of the money when the option price is higher than the market price.



About the author

Mark McCracken

Author: Mark McCracken is a corporate trainer and author living in Higashi Osaka, Japan. He is the author of thousands of online articles as well as the Business English textbook, "25 Business Skills in English".


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