With reference to stock options, this adjective means "having an option exercise price that is higher than the market price of the underlying stock." For example, an option is underwater if its exercise price is $10 but the stock price is $8, meaning it would be cheaper to buy the stock on the open market.
Try the new myStockOptions.com Glossary App! Now available for Android and iOS.
The content is provided as an educational resource.
myStockOptions.com shall not be liable for any errors or delays in the content, or any actions taken in reliance thereon.
Copyright © 2000-2019 myStockPlan.com, Inc. U.S. Patent 7,353,200.
for licensing information