It stands for out-of-the-money swaption; a swaption (swap option) in which the strike price of the option is higher than the forward rate (in the swap). This OTM option (in which the underlying is a swap) would produce no profits if exercised (it has no moneyness).
OTM swaption: swap rate < strike price
The option’s holder has the right to enter into an interest rate swap over the course of its life including maturity date or only at maturity. The swaption might get out of the money and considered as such during its life including maturity date (for an American swaption) or only at maturity (for a European swaption).
