At the Money (ATM)

At the Money (ATM) is a term in options trading that describes a contract where the strike price is exactly equal to the current market price of the underlying asset, meaning the option has zero intrinsic value but possesses maximum time value. In the context of Foreign Exchange (FX) options, an ATM option's strike price matches the current spot exchange rate or, more commonly, the At-the-Money-Forward (ATMF) rate, which is the forward exchange rate for the option's expiration date.