At-the-Money (ATM)
At-the-money (ATM) describes an options contract where the strike price is identical to the current market price of the underlying asset.
Moneyness Comparison: 1. In-the-Money (ITM): Strike is better than market price (has intrinsic value). 2. At-the-Money (ATM): Strike equals market price. 3. Out-of-the-Money (OTM): Strike is worse than market price (only extrinsic value). ATM features: Delta ≈ 0.5, Max Vega, Max Gamma, Max Theta decay.
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Rel_decentralized_finance_defi["decentralized-finance-defi"]:::related -.-> Center
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🧒 Explique-moi comme si j'avais 5 ans
Imagine you have a coupon to buy a game for $60 (the strike price). If the game currently costs exactly $60 in every store (the market price), your coupon is '[At-the-Money](/fr/terms/at-the-money)'. You don't save any money by using it right now, but it's very exciting because if the game's price goes up even a little [bit](/fr/terms/bit), your coupon suddenly becomes very valuable!
🤓 Expert Deep Dive
ATM options are critical for calculating 'Implied Volatility' (IV). They sit at the center of the 'Volatility Smile' or 'Skew'. Because ATM options have no intrinsic value, their entire premium consists of time and volatility value. This makes them highly sensitive to 'Theta' decay; they lose relative value faster than Deep-in-the-money (ITM) or Far-out-of-the-money (OTM) options as expiration nears. From a Greek perspective, ATM options have a 'Gamma' peak—meaning their 'Delta' (price sensitivity) changes most rapidly as the underlying asset price fluctuates around the strike.