What does OTM mean in the context of cryptocurrency?

3 answers

• innocentia nomsaOct 15, 2024 · a year ago
  OTM in the context of cryptocurrency stands for 'Out of the Money.' It refers to an option contract that has no intrinsic value because the current market price of the underlying asset is unfavorable for the option holder. In other words, if an option is OTM, exercising it would result in a loss. Traders and investors often use the term OTM to assess the profitability and risk of options trading strategies.
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• Dianna ElamAug 11, 2020 · 5 years ago
  OTM is an abbreviation commonly used in the cryptocurrency industry. It stands for 'Out of the Money,' which means that the current price of an option is lower than the strike price. This indicates that the option is not profitable to exercise at the moment. Understanding the concept of OTM is crucial for traders who engage in options trading, as it helps them evaluate the potential returns and risks associated with different options strategies.
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• Seyed Mahdi MirabyianSep 01, 2023 · 2 years ago
  OTM, or 'Out of the Money,' is a term used in the cryptocurrency market to describe an option contract that has no intrinsic value. This means that the current price of the underlying asset is below the strike price of the option. When an option is OTM, it is considered unprofitable to exercise. Traders and investors use this term to assess the likelihood of an option becoming profitable before its expiration date. It is important to note that options trading involves risks, and understanding the meaning of OTM is essential for making informed investment decisions.
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