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Can you explain the meaning of 'OTM' in relation to cryptocurrency jargon?

avatarCommunity-buildDec 26, 2021 · 3 years ago3 answers

In the context of cryptocurrency jargon, what does 'OTM' mean?

Can you explain the meaning of 'OTM' in relation to cryptocurrency jargon?

3 answers

  • avatarDec 26, 2021 · 3 years ago
    OTM stands for 'Out of The Money' in cryptocurrency jargon. It refers to an options contract that has no intrinsic value because the strike price is higher than the current market price for a call option, or lower than the current market price for a put option. In simple terms, it means that the option is not profitable at the current market price and would result in a loss if exercised. Traders use this term to describe options that are not favorable for immediate execution.
  • avatarDec 26, 2021 · 3 years ago
    OTM, short for 'Out of The Money,' is a term commonly used in the cryptocurrency world. It refers to an options contract that has no intrinsic value because the strike price is not favorable compared to the current market price. In other words, if you were to exercise the option at the current market price, you would end up losing money. It's important to understand this term when trading options, as it helps you assess the potential profitability of a contract.
  • avatarDec 26, 2021 · 3 years ago
    OTM, or 'Out of The Money,' is a term you'll often hear in the cryptocurrency community. It refers to an options contract that is currently not profitable because the strike price is not favorable. If you were to exercise the option at the current market price, you would be 'out of the money,' meaning you would experience a loss. It's crucial to consider this when trading options, as it helps you make informed decisions and manage your risk effectively. Remember, not all options are created equal, and understanding their status as OTM or ITM (In The Money) is essential.