GLOSSARY // Options
At the Money (ATM)
At the money means the option's strike sits at or nearest to the current stock price. With a stock at $100.20, the 100 strike is the ATM line for both calls and puts.
ATM options are where the action concentrates: they carry the most extrinsic value of any strike, deltas near 0.50, and the highest gamma and theta. That combination makes them the most responsive contracts on the chain — and the fastest-decaying ones. The ATM straddle price is also the market's shorthand for the expected move.
A stock trades at $100. The ATM 100 call costs $3.20 while the 110 call costs $0.45 and the deep ITM 90 call costs $10.60 (only $0.60 of it extrinsic). The 100 strike holds the fattest time value on the chain — $3.20 of pure extrinsic — which is exactly what theta will grind away if the stock goes nowhere.
Related terms
Educational only — not financial advice. Definitions simplified for clarity; markets are messier than definitions.