underwater


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Underwater

1. Describing an out-of-the-money stock option. That is, it describes an option in which the underlying asset is a stock that is currently trading for less than the strike price of the option. For example, an executive at a publicly-traded company may have stock options in which he may buy the stock of his/her own company for $80 per share. If the stock is currently trading at $60 per share, the options are worthless.

2. Insolvent; unable to meet a financial obligation. The term especially applies to being unable to meet a margin call.

underwater

Of or relating to a stock option for which the option exercise price is higher than the market price of the stock.

Underwater.

You're underwater when your employee stock options are out-of-the-money and so currently worthless.

For example, if you have options to buy your company stock at a strike price of $50, and the stock is currently trading at $30, you're $20 underwater on each option. You can see how the next step may be drowning -- financially speaking, of course.

The term underwater is also used to describe situations where the principals are unable to meet their financial obligations.

For example, if an investor is unable to meet margin calls on a margin account that has lost a considerable amount of money, the account is said to be underwater. Similarly a firm that is having financial difficulty is described as underwater.

underwater

A popular expression for a property with a debt larger than its value.You will sometimes encounter prime properties for lease,rather than for sale,because the property is underwater. The owners cannot afford to sell,because a sale at market value would require them to bring cash to the closing table to pay off the debt.

References in periodicals archive ?
The students quickly learned how different the underwater world is.
8] With this in mind, jurisdictions with any type of body of water within its boundaries can recognize that they may have to conduct an underwater recovery of an aircraft.
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Nasir had already defined which particular aspects of underwater robotics he wanted to tackle.
Granted, a dog might not be able to swim underwater as fast as some ducks, but a dog's underwater swimming ability might surprise you.
Associate Professor Pete Strutton from the University of Tasmania said the researchers will gather data on the physical and biological features of the underwater wave.
Hassan bin Mohammed al- Lawati, Director General of Archeology and Museums at the Ministry of Heritage and Culture, said: "The seminar aims to introduce the underwater cultural heritage through the efforts of the Ministry of Heritage and Culture, as well as through the presentation of the new ongoing project to identify and list Omani underwater archaeology.
According to DSIT, Nuclear Power Facilities are particularly vulnerable to underwater threats such as divers, Swimmer Delivery Vehicles (SDV) and Underwater Unmanned Vehicles (UUV), because water intakes are part of the nuclear reactor cooling systems.
Effective January 13, 2005, the National Bridge Inspection Standards (NBIS) require all States to take appropriate action to ensure that underwater bridge inspection programs are underway.