What Is the Practical Difference between a "Near-the-Money" and an "At-the-Money" Option? ⎊ Path

What Is the Practical Difference between a “Near-the-Money” and an “At-the-Money” Option?

At-the-Money (ATM) strictly refers to the option whose strike price is exactly or extremely close to the current underlying price. Near-the-Money (NTM) is a broader, less precise term referring to options that are slightly ITM or slightly OTM, but still very close to the current price.

Practically, NTM options behave very similarly to ATM options in terms of high time value and high sensitivity to price changes (Gamma).

What Is Meant by an Option Being ‘In-the-Money’ (ITM), ‘At-the-Money’ (ATM), or ‘Out-of-the-Money’ (OTM)?

Why Is the Distinction between ATM and NTM Less Critical for Long-Term Options?

Define In-The-Money (ITM) for Both a Call and a Put Option

How Does the Moneyness (ITM, OTM, ATM) of an Option Affect Its Bid-Offer Spread?

How Does the Concept of “Moneyness” Relate to OTM, ATM, and ITM?

What Are the Practical Implications of Trading ITM, ATM, and OTM Options?

Which Category, ATM or NTM, Is Likely to Have a Higher Gamma Value?

Define “In-the-Money,” “At-the-Money,” and “Out-of-the-Money” for a Written Call Option