Striking Price

Striking price

The price at which an option can be exercised. See: Exercise price.

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Striking 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 striking 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 striking price must be higher than the market value. In most cases, the amount of the striking price is stated in the option contract; however, in Asian options the striking price is a formula, rather than a set price. For example, it may be the average price of the underlying over a set period of time. The striking price is also known as the exercise price or, most commonly, as the strike price.