# Definition of __At-the-money__

## At-the-money

An option is at-the-**money** if the strike price of the option is equal to the market price of the

underlying security. For example, if xyz stock is trading at 54, then the xyz 54 option is at-the-**money**.

# Related Terms:

Proposal that the **money** supply be increased at a steady rate equal approximately to the real rate of growth of the economy. Contrast with discretionary policy.

The doctrine that the **money** supply affects only the price level, with no long-run impact on real variables.

The number of times during a year that the **money** supply turns over in supporting that year's economic activity, measured as the ratio of nominal income to the **money** supply.

IRS **rule**s used to allocate income on export sales to a foreign sales corporation.

Accept the project if IRR is greater than the discount rate; reject the project is lower than the

discount rate.

An investment decision **rule** in which the cash flows are discounted at an

interest rate and the payback **rule** is applied on these discounted cash flows.

The requirement that all pool information, as specified under the PSA Uniform Practices, in a

TBA transaction be communicated by the seller to the buyer before 3 p.m. EST on the business day 48-hours

prior to the agreed upon trade date.

A technical trading strategy that combines mechanical **rule**s, such as the CRISMA

(cumulative volume, relative strength, moving average) Trading System of Pruitt and White.

An investment is worth making if it has a positive NPV. Projects with negative NPVs

should be rejected.

SEC **rule** allowing qualified institutional buyers to buy and trade unregistered securities.

**rule** enacted in 1982 that permits firms to file shelf registration statements.

SEC-imposed restrictions on when a short sale may be executed, intended to prevent investors

from destabilizing the price of a stock when the market price is falling. A short sale can be made only when either

1) the sale price of the particular stock is higher than the last trade price (referred to as an uptick trade) or

2) if there is no change in the last trade price of the particular stock, the previous trade price must be

higher than the trade price that preceded it (referred to as a zero uptick).

Specifies the permitted minimum or maximum quantity of securities that can be delivered to

satisfy a TBA trade. For Ginnie Mae, Fannie Mae, and Feddie Mac pass-through securities, the accepted

variance is plus or minus 2.499999 percent per million of the par value of the TBA quantity.

A formula for determining policy. Contrast with discretionary policy.

See **monetarist rule**.

## Rules-versus-Discretion Debate

Argument about whether policy authorities should be allowed to undertake discretionary policy action as they see fit or should be replaced by robots programmed to set policy by following specific formulas. See discretionary policy, policy **rule**.

## Attribution Rules

Legislation under which interest, dividends, or capital gains earned on assets you transfer to your spouse will be treated as your own for tax purposes. Interest or dividends relating to property transferred to children under 18 also will be attributed back to you. The exception to this **rule** is that capital gains relating to property transferred to children under 18 will not be attributed back to you.

## Rule of 72

This is a very important **rule** to know. The **rule** is that the number 72 divided by the rate of return of your investment equals the number of years it takes for your investment to double.

For example

* At 1% your money will double in 72 years.

* At 2% your money will double in 36 years.

* At 3% your money will double in 24 years.

* At 4% your money will double in 18 years.

* At 5% your money will double in 14.4 years.

* At 6% your money will double in 12 years.

* At 7% your money will double in 10.3 years.

* At 8% your money will double in 9 years.

* At 9% your money will double in 8 years.

* At 10% your money will double in 7.2 years.

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