ACCOUNTING TERMS - ACCOUNTING DICTIONARY - ACCOUNTING GLOSSARY
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OUT-OF-THE-MONEY OPTION Definition
OUT-OF-THE-MONEY OPTION is an option that has no intrinsic value; for example, an option whose strike price, in the case of a put, is lower than the stocks current price, or in the case of a call, is higher. An investor who buys an out-of-the-money option is speculating that the option will rise in value and become in-the-money. See IN-THE-MONEY OPTION.
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PPS see PROBABILITY PROPORTIONAL TO SIZE SAMPLING.
PRACTICAL CAPACITY is where the cost of production is based on the practical capacity of production facilities. Therefore, the proportion of overheads allocated to a unit of production is not to be increased as consequence of idle capacity of the plant.
