What is the meaning of OTM in the context of cryptocurrency?

1 answers

• Richardson HutchisonAug 15, 2022 · 4 years ago
  In the context of cryptocurrency, OTM stands for 'Out of The Money.' It refers to an option contract that has no intrinsic value because the strike price is not favorable for exercising the option. OTM options are considered risky because they have a lower chance of being profitable. Traders often use OTM options for speculative strategies, hoping that the underlying asset's price will move significantly in their favor. However, it's important to note that trading OTM options can be highly volatile and may result in a complete loss of the investment. Therefore, it's crucial to have a thorough understanding of the risks involved and to use proper risk management techniques when trading OTM options in the cryptocurrency market.
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