When an option has no immediate value because the current stock price is unfavorable compared to the strike price. For a call option, this means the stock price is below the strike price. For a put option, this means the stock price is above the strike price.
You own a call option with a strike price of $50, and the stock is currently trading at $45. Your option is out of the money because there is no benefit to exercising it at $50 when you can buy the stock on the market for $45. If the stock never rises above $50 before expiration, your option will expire worthless.
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