Strike Price
The strike price (also known as the exercise price) is the pre-agreed price at which the buyer of an option can purchase (call option) or sell (put option) the underlying asset.
Using the strike price market participants can determine whether an option is in the money, at the money, or out of the money, and calculate intrinsic and time value.
Why the strike price matters to investors.
The strike price is a key element of an option contract, affecting the potential value of the option and the level of risk.
It may influence:
● Whether an option has intrinsic value
● Comparisons between different contracts
● Valuation considerations in trading strategies
Options involve a high level of risk, including the possibility of losing the entire premium paid, and may not be suitable for all investors.