Strike price

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Related to Strike price: call option

Strike price

The stated price per share for which underlying stock may be purchased (in the case of a call) or sold (in the case of a put) by the option holder upon exercise of the option contract.

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.

strike price

The exercise price at which the owner of a call option can purchase the underlying stock or the owner of a put option can sell the underlying stock.

Strike price.

The strike price, also called the exercise price, is the price at which you as an options holder can buy or sell the stock or other financial instrument underlying the options contract if you choose to exercise before expiration.

While the strike price is set by the exchange on which the option trades, and changes only if there's a stock split, merger, or some other corporate action that affects the underlying instrument, the market price of the underlying instrument rises and falls during the life of the contract.

As a result, the underlying instrument might reach a price that would put the strike price in-the-money and make exercising the option at the strike price, or selling the option in the marketplace financially advantageous, or it might not. If not, you let the option expire.

References in periodicals archive ?
He said that approximately 920,000 options with strike prices above $10, which were held by senior management and outside directors, have been voluntarily cancelled in exchange for the issuance in late May 2003, of the same number of new options with a strike price equal to the then-prevailing market price of the company's common shares.
Pursuant to a resolution of the General Meeting of Shareholders held on April 4, 2002, the warrant strike price is the issue price for series J shares.
Unfortunately, Citicorp does not have much of an incentive to get more than the strike price for its stock, since there is a $300 million floating rate first mortgage on the property that also allows Trump to defer some of the debt.
Underlying base rates will be appropriately adjusted to reflect the new strike price.
The Government proposes to set the strike price at Au115 per MW/h for onshore wind developments on the Scottish Islands of Orkney, Shetland, and the Western Isles, reflecting their unique circumstances and potential.
Morgan Cazenove pursuant to the Tender Offer, being the Strike Price.
Long Straddle: This strategy involves buying a call and a put option with the same underlying security, expiry date and strike price.
An ITM call option is one where the strike price is less than the market ( spot) price of the underlying stock/ index, that is, the spot price is more than the strike price.
In the first scenario, a company purchases 100 shares of a corporation's stock for $100 per share, writes a 12-month call option on 100 shares with a $110 strike price, and purchases a 12-month put option on 100 shares with a $100 strike price.
An option is a right to buy or sell a stock - usually in lots of 100 shares - at a set price, called the strike price.
The break-even index level for a long call is 4,200, which is arrived at by adding the premium paid (Rs 150) to the strike price (Rs 4,050), whereas the break-even point of 4,105 is calculated by adding the strike price of the purchased call (4,050) and the net debit payment of Rs 55 (Rs 150-95).
If, however, there is a disqualifying disposition of the stock acquired, the disposition would create compensation income for the service provider for the difference between the strike price and the stock's fair market value (FMV) at the time of exercise.