Option out of the Money Law and Legal Definition
A call option is out-of-the-money if the stock is below the strike price of the call, while a put option is out-of-the-money if the stock is higher than the strike price of the put.The following is an example of a case law on option out of the money:
An option is "out of the money" when it would be economically unfavorable to exercise the option. [Andros v. Commissioner, T.C. Memo 1996-133 (T.C. 1996)].