A measure of volatility (at-the-money volatility, ATM volatility) that is calculated by averaging the implied volatilities from a put and call options or sets of pairs at two strike prices that straddle and bracket the spot level and are closet to that level), and then linearly interpolating between the two average implied volatilities at the two strike prices (at two nearest maturities).

It is an estimated value of volatility using average implied volatilities at two strike prices corresponding to closest maturity dates. It measures the calculated or implied mid-rate volatility for an ATM option for a specific expiration date. In other words, it is figured out by solving for the implied volatility of an ATM option. Using the Black-Scholes model, the ATM volatility can be defined as the volatility value that makes the implied price of an ATM vanilla option equal to the market price of that option.