At the Money (ATM)
An option whose strike price equals (or is very close to) the current spot price of the underlying.
An option is at the money when the strike is equal to or very close to the current market price of the underlying. Technically the strike is never exactly at spot, so ATM usually refers to the nearest-strike option.
ATM options have the highest time value of all strikes at the same expiration, because the outcome is most uncertain. Their delta is approximately 0.50 for calls and −0.50 for puts.
ATM options are the most liquid strike for most underlyings and are commonly used to measure implied volatility — the ATM straddle price implies expected move.
Related Terms
Calendar Spread (Options)
Sell a near-dated option and buy a longer-dated option at the same strike. Profits from faster near-term theta decay and favorable IV term structure.
IntermediateDelta
The rate of change in an option's price for a $1 move in the underlying. Ranges from 0 to 1 for calls and −1 to 0 for puts.
IntermediateGamma
The rate of change of delta per $1 move in the underlying — it measures how fast delta itself accelerates.
AdvancedImplied Volatility
The market's forward-looking expectation of volatility, derived by solving the options pricing model for the volatility that matches the observed premium.
AdvancedMoneyness
The relationship between an option's strike price and the current price of the underlying — ITM, ATM, or OTM. Directly drives intrinsic value and delta.
BeginnerStrike Price
The fixed price at which the option holder can buy (call) or sell (put) the underlying asset if they choose to exercise.
BeginnerTime Value
The portion of an option's premium beyond its intrinsic value, reflecting the probability that the option moves further in the money before expiry.
Intermediate