An option that would result in a loss upon immediate exercise is known as an out-of-the-money option. Specifically, a Call option is considered out-of-the-money when the current price is below the strike price. Conversely, a Put option is out-of-the-money when the current price exceeds the strike price. It is important to understand the concept of out-of-the-money options as they play a crucial role in the world of finance. By comprehending this term, you will be equipped with the necessary knowledge to make informed decisions in the realm of options trading.
