An option which has a strike price equal or approximately equal to the underlying asset’s price. There is little or no intrinsic value in at-the-money options. In other words, exercising an at-the-money option immediately will result in a break-even situation: the holder neither gains nor loses any amount (outcome: zero cashflow). However, the holder would lose the premium paid to the option’s seller.

An index option (an option on an index) is at the money when the current index value (reading) is equal to the strike price.

An at-the-money option (for short, ATM option) is also called a near-the-money option (NTM option).