At the Money Options

The best stock option for beginners to trade...

At the money options (ATM) are right in the middle of "Out" and "In" the money options.

Have you ever looked at an option chain? There are hundreds of option contracts listed and new traders have no idea which one to trade.

So they usually go with the most common method for new traders. Picking the cheapest ones, the out of the money options.

At the money options provide a middle of the road choice for traders.

So what does ATM mean?

At-the-money (for puts and calls) is where the stock price and the strike price are the same. Or an option contract with a strike price closest to the current stock price. For example: Stock Price $40.98 and Strike Price $40.

Out of the money options are cheap. They have the potential to give you the greatest reward if the stock moves in price, but they are also the riskiest to trade because the stock has to make a significant move.

In the money options cost more, but people like them because they generally move dollar for dollar with the stock price.

And to be honest most of the info you read on in the money, out of the money, and out of the money won't make much sense until you actually start trading and can "see" what I'm referring to.

The "self education" route is cheaper, but it can often be frustrating as heck.

If you ever want live mentorship then consider registering for the Options Coaching Program.

Until then, just try your best to comprehend the concepts and at least get the basic definition down.

ATM: the strike price and the stock price are the same or nearly equal to each other.

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