At the money: Difference between revisions
From ACT Wiki
Jump to navigationJump to search
imported>Doug Williamson m (Spacing) |
imported>Doug Williamson (Link with new ATMS and ATMF pages.) |
||
| Line 12: | Line 12: | ||
* [[Out of the money]] | * [[Out of the money]] | ||
* [[Swap]] | * [[Swap]] | ||
* [[ATMF]] | |||
* [[ATMS]] | |||
[[Category:Commodity_Risk]] | |||
[[Category:FX_Risk]] | |||
[[Category:Managing_Risk]] | |||
Revision as of 16:53, 17 June 2014
(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.
