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otm
What does otm mean?
'Out of the money': an option whose strike is unfavorable to the underlying's current price, so it holds only time value. Cheap OTM calls are WSB lottery tickets.
"I bought deep OTM calls for pennies hoping for a moonshot."
Origin
Standard options terminology; deep-OTM options are the classic WSB gamble (see FD).
Frequently asked questions
What does OTM mean?
'Out of the money' — an option whose strike price is unfavorable versus the current stock price, so it has no intrinsic value, only time value.
Why does WSB buy OTM options?
Deep OTM calls are cheap, so they act like lottery tickets: a small outlay that can pay off huge if the stock makes a big move ('moonshot').
What's the opposite of OTM?
ITM, or 'in the money' — an option whose strike is favorable and already has real intrinsic value.
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