At The Money
At The Money (ATM) refers to a scenario in which the strike price of an options contract is equal to the market price of its underlying security. In this situation, exercising the option does not result in a profit or loss since the option’s intrinsic value is zero. Exercising an option At The Money may lead to a loss because the premium paid for the option will not be recovered. However, At The Money is still considered a positive indicator, as it suggests the option may soon move in the money (where intrinsic value is generated), depending on future market movements.
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