At the money: Difference between revisions
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imported>Administrator (CSV import) |
imported>Doug Williamson m (Spacing) |
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An option is at the money when immediate exercise of the option would result in neither a gain nor a loss. | An option is at the money when immediate exercise of the option would result in neither a gain nor a loss. | ||
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Revision as of 15:45, 29 July 2013
(ATM).
1. An option is at the money when immediate exercise of the option would result in neither a gain nor a loss. This is when the underlying asset price is equal to the strike price of the option.
2. A derivative such as a swap is at the money when, for example, the swap rate is equal to the relevant current market rate, so that the net present value of the derivative is Nil.
