Exercise price


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Related to Exercise price: call option, put option

Exercise price

The price at which the security underlying an options contract may be bought or sold.

Strike Price

In options, an agreed-upon price for which the underlying is bought (in case of a call) or sold (in case of a put) if the option is exercised. For a call option to be profitable, the strike price must be lower than the market value of the underlying at the time the option is exercised. The opposite is true for a put: the strike price must be higher than the market value. In most cases, the amount of the strike is stated in the option contract; however, in Asian options, the strike is a formula, rather than a set price. For example, the strike may be the average price of the underlying over a set period of time. The strike price is also known as the exercise price or the striking price.

exercise price

The dollar price at which the owner of a warrant or an option can force the writer to sell an asset (in the case of a call option or warrant) or to buy an asset (in the case of a put option). The exercise price is set at the time the option is issued and, except for unusual instances that include warrants, remains constant until the option expires. A market price of an asset above, or expected to be above, an option's exercise price gives the option value. See also aggregate exercise price, step-up.

Exercise price.

An option's exercise price, also called the strike price, is the price at which you can buy or sell the stock or other financial product that underlies that option.

The exercise price is set by the exchange on which the option trades and remains constant for the life of the option.

However, the market value of the underlying investment rises and falls continuously during the period in response to market demand.

References in periodicals archive ?
If the exercise price is paid in the form of shares of employer stock, the employee's basis in the shares of stock treated as having been acquired in exchange for the shares previously held is equal to the basis of the employee in the previously acquired shares.
Opinion 25 requires expense recognition only if an option's exercise price is less than the underlying stock's market price on the grant date or other measurement date.
The Company backdated certain other stock option grants by selecting a grant date and corresponding exercise price that preceded the date that the Company actually determined to make such grants.
It could either pay the exercise price and all applicable taxes to the donor's employer and then receive the shares, or it could arrange for a same-day sale with a broker who would deliver the exercise price and taxes to the donor's employer.
Such options are less attractive to employers because they are more likely to result in recognition of an employee compensation expense since the option's exercise price may be less than the stock's market price at the measurement date (an in the money option).
The sixth grant had an exercise price that was higher than the closing price on the appropriate measurement date.
422(c)(2) provides that the excess of the amount realized on the sale over the exercise price will be the basis of determining the ordinary income to the ISO holder and the deduction to the corporation.
If a person or group becomes an Acquiring Person, each Right will then entitle all other stockholders to purchase, by payment of the exercise price, FFIC common stock (or a common stock equivalent) with a value of twice the exercise price.
tendered their existing warrants to purchase an aggregate of 62,695 shares of common stock at an exercise price of $3.
Each Right will entitle shareholders to buy one one-hundredth of a share of a new series of junior participating preferred stock at an exercise price of $40 upon the occurrence of certain events.
Under certain circumstances, each Right will entitle stockholders to buy one one-thousandth of a share of newly created Series A Junior Participating Preferred Stock of the Company at an exercise price of $50.
On July 10, 1992, the Company had announced that the exercise price of the Initial Warrants was being reduced from $7.

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