Underwater

You're underwater when your employee stock options are out-of-the-money and so currently worthless.

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.

The term underwater is also used to describe situations where the principals are unable to meet their financial obligations.

For example, if an investor is unable to meet margin calls on a margin account that has lost a considerable amount of money, the account is said to be underwater. Similarly a firm that is having financial difficulty is described as underwater.