What is the meaning of at the money option?

at the money option is an option purchased by an investor to buy or sell, with a strike price equal to the current market price of the underlying cash or futures contract. In this instance, the intrinsic value of the option is zero. Its value reflects the premium paid for the additional time the holder has to decide whether or not to exercise the option, in especially in times of price volatility.

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APABarry Goldsmith. (2010). at the money option. Retrieved September 29, 2026, from http://smartdefine.org/at_the_money_option/definitions/1148004
ChicagoBarry Goldsmith. 2010. "at the money option" http://smartdefine.org/at_the_money_option/definitions/1148004 (accessed September 29, 2026).
HarvardBarry Goldsmith 2010, at the money option, Smart Define, viewed 29 September, 2026, <http://smartdefine.org/at_the_money_option/definitions/1148004>.
MLABarry Goldsmith. "at the money option" 21 October 2010. Web. 29 September 2026. <http://smartdefine.org/at_the_money_option/definitions/1148004>