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Finance Glossary

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At-the-Money

Definition:

Is sounds like something contestants shout during Wheel of Fortune ("Big Money! Atta Money! At-the-Money!"), but at-the-money means that stock prices match the strike price of the stock options that an investor has bought. So if you have the right to buy a share at $50 and then the share actually is at $50 when you go to buy, the share is at-the-money. 

Example

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 a share (the bid), then it is said to be "at-the-money" or at the strike price. If it climbs above $80, then it's "in-the-money"; below $80, it's "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).