Out Of The Money - OTM

term used to describe an option whose strike price for a stock is either higher than the current market value, in the case of a call, or lower, in the case of a put. For example, an XYZ December 60 call option would be out of the money when XYZ stock was selling for $55 a share. Similarly, an XYZ December 60 put option would be out of the money when XYZ stock was selling for $65 a share.
Someone buying an out-of-the-money option hopes that the option will move In the Money, or at least in that direction. The buyer of the above XYZ call would want the stock to climb above $60 a share, whereas the put buyer would like the stock to drop below $60 a share.

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1. For a call, when an option's strike price is higher than the market price of the underlying asset.

2. For a put, when the strike price is below the market price of the underlying asset.

Investopedia Says:
Basically, an option that would be worthless if it expired today.

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In tournament play, to be one of the players who does not receive a portion of the prize pool.

SoundPoker Says: "If John busts next he's going to be out of the money."

See Also: Bubble, Busted, In The Money, Shootout Tournament