At-the-Money (ATM)

At-the-Money (ATM) means an option's strike price—the price you'd pay to buy or sell the underlying stock—is essentially equal to the stock's current market price. You'll run into this term when trading options (contracts that give you the right to buy or sell a stock at a set price). ATM options matter because they're right in the sweet spot: they have the most time value, meaning they're sensitive to price swings, which can make them cheaper than options deeper in-the-money but riskier than far out-of-the-money bets. For example, if TechCorp stock trades at $50, a $50 call option is at-the-money.