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strike 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 strike price exceeds the spot price (in the case of a put), or the amount by which the spot price exceeds the strike price (in the case of a call). In general, the smaller the difference between spot and strike price, the higher the option premium. also called exercise price.

Featured Tip

Basic SPOT OptionsOne way to reduce risks while trading on the Forex is to buy SPOT options that have barrier levels already in place. The One-Touch Spot option will payout if the exchange rates merely rise to a certai ... Read more


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