Out-of-the-Money (OTM)

An option that has no intrinsic value -- a call option whose strike price is above the current stock price, or a put option whose strike price is below it. OTM options are cheaper than at-the-money or in-the-money options because they require a larger price move to become profitable, but they offer higher percentage returns if the move materializes. Buying far OTM options is essentially buying lottery tickets, which is why they are popular in speculative "YOLO" trades on forums like WallStreetBets.