What is At the Money (ATM) Put Option?

What is At the Money (ATM) Put Option?

A put option is said to be ATM when the underlying security’s current market price is equal to the strike price of the contract.
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    • What is At the Money (ATM) option?

      An option is said to be at the money if the spot price of the underlying is equal to the strike price. Any movement in the spot price of underlying from this stage would either make the option ITM or OTM.
    • What is At the Money (ATM) Call Option?

      A call option is said to be ATM when the underlying security’s current market price is equal to the strike price of the contract.
    • What is In The Money (ITM) Put Option?

      A put option is said to be ITM when the underlying security’s current market price is lesser than the strike price of the contract.
    • What is Out of the Money (OTM) Put Option?

      A put option is said to be OTM when the underlying security’s current market price is greater than the strike price of the contract.
    • What is the effect of buying a Put Option?

      The buyer of the put option has the right, but not an obligation, to buy the underlying asset at the strike price at expiry. The buyer of a put option has to pay a premium to the seller for the privilege.