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Derivatives

Strike Price

The pre-agreed price at which an option can be exercised.

In depth

For a call, strike is the buy price; for a put, strike is the sell price. "In-the-money" (ITM): strike is favorable to current price. "Out-of-the-money" (OTM): strike is unfavorable. "At-the-money" (ATM): strike near current price.

Frequently asked about Strike Price

What is Strike Price?

The pre-agreed price at which an option can be exercised. For a call, strike is the buy price; for a put, strike is the sell price. "In-the-money" (ITM): strike is favorable to current price. "Out-of-the-money" (OTM): strike is unfavorable. "At-the-money" (ATM): strike near current price.

Why does Strike Price matter for investors?

In derivatives, Strike Price is one of the building blocks investors use to compare opportunities and assess risk. Understanding it helps you read research notes, earnings reports, and market commentary without getting lost in jargon.

How is Strike Price used in practice?

For a call, strike is the buy price; for a put, strike is the sell price. "In-the-money" (ITM): strike is favorable to current price.

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