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Define: At The Money (ATM) Options
At The Money Options are options with strike price equal to the prevailing stock price.
Call or put options with strike price of $50 would be at the money if the underlying stock is also $50.
Strike prices near to the price of the stock would also be regarded as At-The-Money. For instance, call or put options with strike price of $50 would still be regarded as at the money if the stock is $50.20.
Read the full tutorial on At The Money Options.