At The Money
The strike sitting right at the current spot — the pivot where time value, gamma and uncertainty all peak.
Definition
An option is at the money (ATM) when its strike is closest to the current spot price of the underlying. At this point both the call and put have little to no intrinsic value — their premium is almost entirely time value. It is the middle state of moneyness between ITM and OTM.
Why it matters
ATM options carry the most time value and the highest gamma, so they react sharply to moves in the underlying. They have a delta near 0.5 and are the most actively traded strikes, which is why ATM IV is the market's headline read on expected volatility. Straddles and many directional trades are built around the ATM strike.
Example
NIFTY spot is 22,520 and strikes are listed in steps of 50. The 22,500 strike is the ATM strike because it is nearest to spot. Its call and put both trade almost purely on time value and implied volatility.
Find the ATM strike live
TradePulse's option chain marks the ATM strike and shows live IV, OI and premium around spot.