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 call), or the amount by which the spot price exceeds the strike price (in the case of a put). In general, the smaller the difference between spot and strike price, the higher the option premium. also called exercise price.
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Related Terms
aggregate exercise price, assignment, at the money, in the money, close to the money, out of the money, Black-Scholes Option Pricing Model, break-even point, butterfly spread, bear spread, combination, diagonal spread, intervals, intrinsic value, lookback option, perpendicular spread, price, roll down, roll up, variable ratio write, vertical spread
'strike price
' appears in the definitions of these terms on BusinessDictionary.com
diagonal spread, flex option, vertical spread, straddle
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