At-the-money (ATM)
ATM means the strike is closest to the current spot price (roughly).
Quick facts
| Field | Value |
|---|---|
| Category | Options Trading Terminology |
| Use | Learn vocabulary to read chains and manage risk |
Definition
At-the-money (ATM) options have a strike near the current underlying price. ATM options often have significant time value and are highly sensitive to both price movement (delta/gamma) and time decay (theta).
Quick example
Info
If spot is 100, the 100 strike call/put is typically considered ATM.
Time value (typical) by moneyness (illustrative)
ATM options usually have the highest time value; theta decay is strongest here.
Summary
- ATM options are “most reactive” near expiry.
- Good for directional and volatility trades, but watch theta.