™A $50 strike call with the stock at $45 has no intrinsic value, but can retain positive time value before expiration.
Options
Out of the money (OTM)
An option with no intrinsic value based on the current underlying price.
Plain-English context
Put the definition to work.
Zero intrinsic value need not mean zero premium before expiration; the seller can still carry meaningful risk.
Further reading and verification. Examples are hypothetical, not current quotes or recommendations. Product terms, tax treatment and market rules can change. OCC / Options Industry Council — options basics