An option whose strike price is equal to, or very close to, the current market price of the underlying.
An option is at the money (ATM) when its strike price is approximately equal to the current market price of the underlying asset. ATM options have no intrinsic value but the highest time value and the highest sensitivity to changes in implied volatility and time decay among all strikes. They are widely used in strategies like straddles because they offer the most liquidity and the fastest response to market moves.
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