Strike price

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Related to strike prices: Call options

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.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

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.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.

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.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.
References in periodicals archive ?
* At 9:37 a.m., a trader sold 3,925 Activision call options with a $52 strike price expiring on Sept.
In the summer the UK Government announced it would not back TLP's request for a strike price (paid for by consumers' energy bills) of PS92.50p per megawatt hour of energy produced for 35 years.
There is always pain on both sides in any negotiations and over the last two years, TLP has, on several occasions, reduced the project's required green subsidy a a so called contract for difference or strike price.
An increase in the offshore wind strike price from PS135 per MW/h to PS140 per MW/h has seen the chairman of one energy giant declare "it's game on" for the North Sea.
CfDs will be financial instruments between generators and a Government owned company designed to provide investors with a guaranteed fixed price for electricity output based on a 'strike Price', with payments being due to or by the generator depending on the prevailing wholesale market price when compared to the strike Price.
However, traders estimate the strike price for the high-viscosity parcel to be lower than the previous sale, done through Aramco's joint-venture partner ExxonMobil.
However, if the markets rise, the loss will be limited to Rs 13,650, which is the difference between the strike prices of two call options (purchased and sold) and the net premium [(4,650-4,340-(65-28))x50].
The strategy is implemented by buying an in the money (ITM) call option (strike price less than the market price) and selling an out of the money (OTM) call option (strike price higher than the market price).
At present, large deals in some over-the-counter (OTC) contracts with the same strike prices and expiry months as exchange-traded contracts are already executed as block trades in HKEx's derivatives market.
It is therefore necessary to determine the underlying value where each class would receive value, known as the strike price.
The July 1 relationships show three strike prices above the December corn futures price of $2.40 per bushel and three below.
* strike prices that vary from the stock price on the grant date;