What is Binary Options ‘At-The-Money’? – Definition

At-the-money, in-the-money, and out of the money are three terms. These terms express the relationship between the binary option and the asset market that is underlying within it. These specific terms are basically referring to that of indicative price. Thus, stating that it is either below/above the strike price.

In the Money or ITM is when the market price of an asset is already following the path of your high option prediction. Out of the Money or OTM is stated when the market price of an asset is far away from the strike price. ATM or at the money has different significance!

Binary Options At the Money means that underlying security is trading closer to the strike price of the asset. Hence, this is when we say that the binary asset is At-the-Money or At the Market. It is the current position of the trade for that market or asset.

Example for a better explanation!

Suppose a binary options asset is worth $0 or $100 at the time of expiration. A binary At the Money would have a worth of around $50. Hence, it means that the ATM binary asset has the probability of closing or expiring at either $100 or $0.

Therefore, at this point, there is a 50% chance that the market or asset price can go either way, without any assurance of peak or drop. If you wish for an ATM strike to turn in your favor, then the price should move in your predicted direction. And that should be irrespective of whether you bought or sold the asset/contract.