Out-Of-The-Money

Business / Taxes / Out-Of-The-Money: An option is out-of-the-money when the market price of an instrument on which you hold an option is not close to the strike price. Call options — which you buy when you think the price is going up — are out-of-the-money when the market price is below the strike price. Put options — which you buy when you think the price of the underlying instrument is going down — are out-of-the-money when the market price is higher than the strike price. For example, a call option on a stock with a strike price of $50 would be out-of-the-money if the current market price of the stock were $40. And a put option at $50 on the same stock would be out-of-the-money if its market price were $60. When an option expires out-of-the-money, it has no value.

Out-Of-The-Money Option

Business / Finance / 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. That is, you have the right to purchase a security at a price higher than the market MORE

Strangle

Business / Finance / Strangle: The simplest form of depreciation, in which an equal expense is recorded in each year of an asset's useful life. For example, if the asset has a purchase price of $1,200,000, a useful life of four yea MORE

Underwater

Business / Taxes / Underwater: You’re underwater when your employee stock options are out-of-the-money and so currently worthless. For example, if you have options to buy your company stock at a strike price of $50, and the stock MORE

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