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Striking Price

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

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.


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Whenever an option is exercised, the purchase price of 100 shares of stock takes place at that fixed price, which is called the striking price of the option.
To justify exercise, market value has to be higher than the striking price (of a call) or lower than the striking price (of a put).
 
 
 
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