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OPTIONS -> OTM PUTS Updated On 29-04-2012 at 5:53 am
Description When the strike price is less than the underlying stocks trading price . In order to become an ATM or ITM option the stock must decline in price .
Xpert Comments OTM puts are bought by traders who are extremely bearish on a stock and expect a definite downward price movement ,Basically the option would be worthless if expired today . Deep out of the money puts are bought who are willing to pay a premiumon the basis of time value ,time value decreases as the option moves closer to expiry.
 
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