Definition of At the Money

When the strike price of the option is identical to the price of the stock, the situation is termed as ‘at the money.’

An option placed in an ‘at the money’ situation is called an at the money option. In such an option, the strike price matches the price of the stock.

Points to remember:

• At the money describes the relationship between the option’s strike price and the security’s price.
• This option has no intrinsic value.
• The trading activity tends to be high when options are at the money.

Example:
If the strike price of the option is 10000 and the spot price is also 10000 then the relationship between them is termed as ‘At the Money’ option.