What happens if an option expires out of the money?

There can be two scenarios:

When a call Option expires out of the money

When a put option expires out of the money

When a call option expires out of the money: A call option is said to be "out of the money" (OTM) when the strike price is higher than the current market price of the underlying asset. In this case, the buyer loses the premium paid to buy the contract and the seller makes a profit.

When a put option expires "out of the money": A put option is considered "out of the money" (OTM) if the strike price is below the current market price of the underlying asset. In this case, the buyer loses the premium paid to buy the contract and the seller makes a profit.