A swaption (swap option) in which the strike price of the option and the forward rate (in the swap) are equal. It is an at-the-money option (on a swap): it has no value upon exercise (its moneyness is zero).

At the money swaption: swap rate = strike price

The option’s holder has the right to enter into an interest rate swap over the course of its life including maturity date or only at maturity. The swaption might get at the money and considered as such during its life including maturity date (for an American swaption) or only at maturity (for a European swaption).

The at-the-money swaption on a fixed-rate payer swap can be considered an option on the forward swap rate (swap rate) or on the value of a forward swap with a strike price of zero.