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underwater

   Also found in: Dictionary/thesaurus, Acronyms, Wikipedia 0.06 sec.
Underwater
1. The condition a call option is in when its strike price is higher than the market price of the underlying stock.

2. The condition a put option is in when its strike price is lower than the market price of the underlying stock.

Also known as "out of the money."

Notes:
An underwater option would be worthless if it expired today.

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