ATM means at the money. An option is exactly at the money when the underlying price equals its strike price. With a stock at $50, both a $50 call and a $50 put are at the money.
An exactly ATM option has no intrinsic value. Before expiration, it can still have a premium because there is time for the underlying to move. In everyday use, traders may call the nearest available strike “ATM” even when the prices are not equal.
Compare ITM and OTM, or read the complete moneyness guide and at-the-money explanation.
