The term lateral applies to that side of a limb that is furthest from the midline in the anatomical position.
It does not matter what position you move your arms to, this side of your limb is always called the lateral side.
Think of this blue area of your arm or leg as being painted.
No matter what position you put your arm in – above your head, behind your back or even stand on your hands this side of your arm will always be blue!
It is the same with the term lateral .