Definition of At The Money

At the money is a term used to describe an option when the underlying security price is equal to the exercise price of the option.

Applying "At The Money" to Securities Exams:

when an option is said to be at The Money it is not describing the profitability of an option position but simply the relationship of the the underlying stock price to the option’s strike price. Options that are at the money are more valuable than options that are out of the money because the strike price is equal to the price of the underlying security and has a very good chance for the option to go in the money and be exercised.

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