What is the ATM Based selection type in the Option JSON Bridge?
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In the ATM Based selection type, you don’t manually select an option contract or a premium. Instead, you choose how far away from the current ATM (At-The-Money) strike you want the platform to select the option.
This is done using the ATM Gap value.
For example:
-ATM Gap = 0 → Current ATM Strike
-ATM Gap = +1 → One strike OTM
-ATM Gap = +2 → Two strikes OTM
-ATM Gap = -1 → One strike ITM
-ATM Gap = -2 → Two strikes ITM
Suppose NIFTY is trading around 22,500, making 22,500 the ATM strike.
If the Script Type is CE, then:
-ATM Gap = 0 → 22500 CE
-ATM Gap = +1 → 22550 CE
-ATM Gap = +2 → 22600 CE
-ATM Gap = -1 → 22450 CE
-ATM Gap = -2 → 22400 CE
This selection type is useful when you always want to trade a strike relative to the current ATM level, regardless of market movement.
(Refer to the image below for the ATM Based configuration.)
