At the money: Difference between revisions
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imported>Doug Williamson (Link with new ATMS and ATMF pages.) |
imported>Doug Williamson m (Link with Time value page.) |
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[[Category: | [[Category:Manage_risks]] | ||
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[[Category: | [[Category:Risk_frameworks]] | ||
Revision as of 06:49, 19 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.
