Options trading
At the money (ATM)
Definition
An option whose strike equals the stock price, or is the closest listed strike to it. It has no intrinsic value, only time value, and it has the most exposure to time decay.
Example
Say a stock trades at $100, so the $100 call and the $100 put are both at the money. If the call costs $3.00 with 30 days left, all $3.00 is time value. With the stock unchanged, it might be worth about $2.45 ten days later, a $55 loss per contract from time decay alone.
Hypothetical numbers, for illustration only.
Also defined in
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