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.
Related Terms
Expense Ratios Regular
Regular mutual fund plans have a higher expense ratio compared to direct plans. This is...
Equity Trading
Equity trading involves buying and selling equity shares in secondary markets, via stock exchanges. Traders...
India VIX
India VIX, or the Indian Volatility Index, measures market volatility and investor sentiment. A higher...
Insider Trading
Insider trading involves buying or selling shares based on non-public, material information, often obtained through...
Benchmark
A benchmark is a standard used by investors to evaluate the performance of stocks, commodities,...
Internal Rate Of Return
The Internal Rate of Return (IRR) measures the compound annual return of a financial asset,...
