At-the-Money (ATM)

At-the-Money (ATM) describes an option whose strike price—the price at which you can buy or sell the underlying stock—matches 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 on the fence: they have no intrinsic value yet, but they're sensitive to price swings, making them popular for traders betting on volatility. For example, if TechCorp stock trades at $50, a call option with a $50 strike price is at-the-money. ATM options sit between in-the-money (profitable if exercised now) and out-of-the-money (unprofitable if exercised now).