Technical Definition

At-the-Money (ATM)

An option is at the money when its strike price is approximately equal to the current underlying price.

By Crypto University Editorial
MoneynessStrike PriceGamma

✦ Key Insight

ATM options are often highly sensitive to price, time, and volatility changes.

✕ Common Misconceptions

Exact ATM classification can vary when no strike matches spot perfectly.

Detailed Explanation

ATM options often have little or no intrinsic value but can contain substantial time value.

In Practice

“BTC trades near $70,000 and the $70,000 strike option is considered ATM.”

Dig Deeper

Strike Price

The strike price is the predetermined price at which an option can be exercised according to its contract terms.

Option Premium

Option premium is the price paid by an option buyer and received by an option seller for the contract.

Implied Volatility (IV)

Implied volatility is the volatility level that an option pricing model backs out from the option's current market price.

Gamma

Gamma estimates how quickly an option's delta changes as the underlying price changes.

Moneyness

Moneyness describes an option's strike price relative to the current underlying price.