At The Money

This term is used in binary options to describe the event in the closure point of a position in which the strike price and current market price are identical – resulting in neither a winning nor a losing trade.

There are three possible outcomes for any position: ‘At The Money’, meaning the trader has neither lost nor won due to the expiry rate being similar to the strike rate, ‘In The Money’ (meaning a profit has been made on top of the initial investment), and ‘Out Of The Money’ (meaning the initial investment has been lost).

When trading binary options, in the event of an expiry price being similar to the strike price, a Call and Put option are therefore said to be At the Money.

For example, if a trader places a Call option on the EUR/USD pair at the opening rate of 1.3756 and the option’s closing rate is 1.3756, the option is considered null and is therefore At The Money.

Likewise, if a Put option is placed on the EUR/USD pair at the opening rate of 1. 3756 and the option’s closing rate is 1.3756, the option is At The Money and the trader neither loses nor wins.