[uhn-der-waw-ter, -wot-er] 
| 1. | existing or occurring under water. |
| 2. | designed to be used under water. |
| 3. | located below a ship's waterline. |
| 4. | beneath the water: to travel underwater. |
| 5. | the water beneath the surface: cold currents in the underwater. |
| 6. | underwaters, the depths, as of a sea, lake, etc. |
| un·der·wa·ter (ŭn'dər-wô'tər, -wŏt'ər) adj.
|
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."
Investopedia Commentary
An underwater option would be worthless if it expired today.
Related Links
Options Basics Tutorial
See also: Call Option, In the Money, Option, Put Option, Strike Price
Also spelled: under-water, under water
underwater
dərˈwɔ