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Under Water

A stock option for which the option's grant price is higher than the current market price for the underlying stock.

Additional Comments:

In view of the context for this phrase, "under water" seems to be a "buzzword" term used by stock traders to describe or characterize stocks that have sunk, usually quickly and drastiscally, in their market value.

For example, if you have options to buy your company stock at a strike price of $50, and the stock is currently trading at $30, you're $20 underwater on each option. You can see how the next step may be drowning -- financially speaking, of course.

Related Terms:

Out of the Money
Refers to an options contract that has no intrinsic value; for instance, a call option whose ...

An option is a type of derivative - its value is derived from an underlying asset, ...

Intrinsic Value
This is a measure of any real value to the option. The amount by which an ...

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