exercise price

Definition
The specified price on an option contract at which the contract may be exercised, whereby a call option buyer can buy the underlier or a put option buyer can sell the underlier. The buyer's profit from exercising the option is the amount by which the spot price exceeds the exercise price (in the case of a call), or the amount by which the exercise price exceeds the spot price (in the case of a put). In general, the smaller the difference between spot and exercise price, the higher the option premium. also called strike price.




exercise price is ...
... part of the
Options and Trading subjects.


Related Terms

aggregate exercise price -  More
guarantee letter -
statutory stock option -  More
stock option plan, stock swap, subscription warrant, warrant, implied volatility, reload option, exercise settlement amount, graduated call writing


exercise price appears in the definitions of these other terms on BusinessDictionary.com

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