Verbull Word of the day
Finance glossary

At the Money

Options & Derivatives · intermediate
Definition

An option whose strike price equals the current market price.

An option is at the money when its strike price is roughly equal to the underlying market price. These options have no intrinsic value but the highest time value and are the most sensitive to changes in volatility and price, making them popular for certain strategies.

In a sentence

With the strike right at the current price, the option was trading At the Money, making it the most sensitive to volatility.

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