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 ?
1 million shares at a strike price of Rs26 per share.
The offer value was for 35,000,000 and bidding volume was recorded at 55,956,120 at a strike price of Rs 80 per share, resulting in an over-subscription of 1.
It would be interesting to learn what the strike price would be if the Welsh and UK governments invested the people's money in its construction - say, PS700,000.
Redruth EfW, an 8MW advanced conversion technology project, achieved a record low strike price at 40/MWh.
The last 12 minutes bidding activity of the group indicated that the intent was to ramp the strike price of issue rather than bidding at a fair price.
According to the company, the primary insiders in the company who have exercised share options are Tone Kvale, CFO, who has exercised 30,000 options in the company, corresponding to 30,000 shares at the strike price of NOK6.
Draft strike prices for CfDs were announced in July.
The directors have waived their rights to receive options at a strike price of 20p in exchange for relinquishing their rights to options with a strike price of 40p.
The ITM put option will have a higher strike price compared to the OTM put option.
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).
1361, which states that generally call options, warrants, or similar instruments (collectively, "call options") are treated as a second class of stock if the call options are substantially certain to be exercised and have a strike price substantially below the FMV of the underlying stock on the date that the call options are issued or transferred by an eligible shareholder to a person who is not an eligible shareholder.
Option values are determined by several important characteristics: the strike price, the expiration date, and the underlying security.