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Out of the money |
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Out of the moneyAn option or warrant with negative intrinsic value.a call option/warrant whose exercise price is higher than the price of its underlying asset has no intrinsic value and is out of the money. e.g. an option to buy a share at 80p when it is trading at 72p.a put option whose exercise price is lower than the price of its underlying asset has no intrinsic value and is out of the money. e.g. an option to sell a share at 72p when it is trading at 80p.The only value that out of the money options/warrants can have is their time value. Put another way, while there is still some time before the expiry of the option or warrant, there is always a chance that the price of the underlying asset will move in favour of the option/warrant holder. Using the examples above, the holder of the put option might be saved if the price of the share rises to 90p, and the holder of the put option might be saved if the price of the share drops to 60p. Time value declines the nearer the option gets to expiry.Similar MatchesNarrow moneyNarrow moneyAnother name for M1 in the USA and M0 in the UK (see 'money supply'). Precautionary demand (for money)Precautionary demand (for money)The need to meet unexpected or extraordinary contingencies with a buffer stock of cash. Near moneyNear moneyAssets that are easily convertible into cash, such as money market accounts and bank deposits. Pre-Money ValuationPre-Money ValuationPre-Money Valuation refers to the value of the company before an outside investment is made. Thus if a company has a pre-money valuation of $5 million, and a Venture Capitalist invests $10 million, then the Venture Capital firm will own 66% of the business after the investment ($10M / $15M = 66%) High powered moneyHigh powered moneySame as monetary base, in the sense of currency plus commercial bank reserves. Further SuggestionsMoney Market MutualMoney market instruments Time value of money Money Flow Index Money base Smart money Sound money Fiat money Seed money Money overhang H Hard Money Mortgage money supply Money purchase plan Money order money transmission Dear money Purchase money mortgage Contracted out money purchase scheme Tax exempt money market fund Fun money money purchase scheme (defined contributions scheme) money market Money supply Money market hedge Call money rate |
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