Glossary

What Does Out of the Money Mean?

Out of the Money means your binary options prediction was incorrect at expiry and you lose your stake. Learn the full loss structure, how to manage OTM risk, and position sizing guidance.

Maria R.
• 28 июля 2026

Out of the Money (OTM) means your trade prediction was incorrect at expiry. For a Call trade, price finished at or below the strike price. For a Put trade, price finished at or above the strike price. An OTM result means you lose your entire stake.

OTM Examples

Call trade — OTM:
Strike price: 1.0850 | Expiry price: 1.0848 → Price is below strike → Call is Out of the Money ✗ — stake lost

Put trade — OTM:
Strike price: $2,350 | Expiry price: $2,352 → Price is above strike → Put is Out of the Money ✗ — stake lost

The Full Loss Structure

Unlike CFDs where you can partially recover a losing position, binary options OTM results in a complete loss of the stake. There is no partial outcome — the trade either wins the full payout or loses the full stake.

Some platforms offer a small refund on OTM trades (typically 5–10% of stake) — but these refund structures are usually linked to bonus conditions. Check the specific terms before relying on any refund.

Managing OTM Risk

Because each OTM trade loses 100% of the stake, position sizing is critical:

  • Risk no more than 1–2% of your total account per trade
  • At 2% risk per trade, you can sustain 50 consecutive OTM results before losing the account — though this is an extreme scenario
  • At 10% risk per trade, 10 consecutive OTM results eliminates the account

See our Risk Management Guide → for full position sizing methodology.

Related Terms

→ In the Money | At the Money | Payout Rate | Win Rate | Breakeven Win Rate

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