A measure of volatility (at-the-money volatility, ATM volatility) that represents the risk-neutral standard deviation (SD) calculated on at-the-money option (ATM option) prices for the purpose of determining an option’s premium. Calculating the at-the-money implied volatility is based on the strikes closest to the at-the-money spot price.

This measure of volatility can be determined as the quoted price of a straddle an approximate delta of 0.5. A straddle is a combination of a call and a put option with the same strike price. The straddle price constitutes the at-the-money implied volatility.

It is known for short as ATMIV or ATM-IV.