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Finance Glossary

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At-the-money generally refers to stock prices relative to the strike price of the stock options that an investor has bought. That is, Joe Shmoe has paid 3 bucks for the right to buy a share of KO (Coke) for $80. That option expires in a week and the stock is at $76 a share today. If the stock climbs to $80.00 a share (the bid), then it is said to be "at the money" or at the strike price. If it climbs above $80.00 then it is "in the money" and below $80, it is "out of the money", honey. Note that KO could be $82.50 and the call option buyer has still lost money on the trade (she paid $3 for the call and KO ended up only $2.50 in the money so she lost half a buck.