Out of The Money (OTM)
A call option with a strike above the underlying price, or a put option with a strike below the underlying price.
Explanation
OTM options have zero intrinsic value; their entire premium is extrinsic (time value). They are cheaper than ITM options but have a lower probability of expiring profitable. OTM options are popular for speculation (leverage) and premium selling (high probability of expiring worthless).
Example
AAPL trades at $150. The 160-strike call and the 140-strike put are both out of the money.