All termsOptions FundamentalsStart here
Out of the Money
An option is out of the money when it has no intrinsic value based on the current relationship between the underlying price and strike price. A call is OTM when the underlying trades below the strike. A put is OTM when the underlying trades above the strike.
Why it matters to you
OTM does not mean worthless. Before expiration, an OTM option may still have extrinsic value because there is still a possibility that market conditions change before the contract expires.