Youre' Underwater' when your stock options are out of the money. That means the strike price of a call option is higher than the stocks market price or the strike price of a put option is lower than the market price. Although you can technically be underwater with both call and put options, the term is used primarily to describe a situation that occurs when options youve received as part of an employee compensation package are currently worthless. For example, if you have options on your company stock with a strike price of $50, and the stock is currently trading at $30, youre $20 underwater on each option. You can see how the next step may be drowningfinancially speaking, of course.
Barry Goldsmith
| APA | Barry Goldsmith. (2010). underwater. Retrieved September 23, 2026, from http://smartdefine.org/underwater/definitions/1165843 |
| Chicago | Barry Goldsmith. 2010. "underwater" http://smartdefine.org/underwater/definitions/1165843 (accessed September 23, 2026). |
| Harvard | Barry Goldsmith 2010, underwater, Smart Define, viewed 23 September, 2026, <http://smartdefine.org/underwater/definitions/1165843>. |
| MLA | Barry Goldsmith. "underwater" 21 October 2010. Web. 23 September 2026. <http://smartdefine.org/underwater/definitions/1165843> |