Definition of At-the-Money (ATM) Option

Financial Terms Beginning with A

What is an At-the-Money Option

An at-the-money option is an options contract where the strike price is equal in value to the stock or underlying asset price if it were immediately exercised. Since the values are rarely exactly equal, the stock or underlying asset price that is closest to the strike price is often considered to be the at-the-money strike price.

As an example, if a stock has a market price of $41.75 and there are options contracts with a 41 and 42 strike price, the 42 call and the 42 put options would be the at-the-money option contracts.

GlobEx Markets Financial Dictionary of Terms, Phrases and Concepts

The GlobEx Markets financial dictionary is a reference resource that provides the definitions and explanations of various financial terms, phrases and concepts that are used in international finance and global investing. It includes a broad range of financial terms, such as those related to stocks, bonds, currencies, commodities, options, futures, crypto and much more.

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Related Investment Terms

Extrinsic Value

In-the-Money (ITM) Option

Out-of-the-Money (OTM) Option

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