An ‘at the money’ option is an option that would lead to zero cash flow to the holder if it were exercised immediately. An option on the index is at the money when the current index equals the strike price (i.e. spot price = strike price).
Spending: If you buy things you don't need, you'll soon sell things you need.
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A derivative is an instrument whose value is derived from the value of one or more underlying assets, which can be commodities, precious metals, currency, bonds, stocks, stock indices, etc.