Definition: At The Money refers to an option whose strike price equals the price of the underlying equity, index or commodity.
Example: If Pepsi stock is trading at $75, then the Pepsi $75 call option is at the money, and so is the Pepsi $75 put option. An at-the-money option has no intrinsic value (since the strike and the underlying prices are the same), but will have time value (value if the stock goes up during the period of the call option). The options that are at the money tend to be more active than when it is not at the money. These options are also referred to as ATM options (At The Money).