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.
Cite this definition
'exercise price
' appears in the definitions of these terms on BusinessDictionary.combutterfly spread, in-the-money option, out-of-the-money option, Asian option, at-the-money forward option, and
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