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Stock Trading To Go
Jun 2
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When trading iron condors options investors should closely follow these four recommendations to be profitable and successful.
Stock Trading To Go
Mar 9
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This options education article is a follow on to the earlier article on 9 Option Terms every Investor Should Know.
studentofmarkets.com
Dec 27
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The Everyday Finance blog recently discussed an options trading strategy that he uses to limit his risk - a credit spread. It involves selling a Put option at a given strike price and buying protection from another put option at a lower strike...
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more ▼WIKI ANALYSIS
WIKI ANALYSIS| This article is part of WikiProject Definitions. Consider editing to improve it. View articles referencing this definition. |
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The strike price is the price at which a derivatives contract can be exercised -- the strike price is independent of the spot price and is agreed upon by the parties entering the contract. For example: A holder of a call option for Exxon-Mobil with a strike price of $82 allows the holder to buy Exxon-Mobil shares at $82, irrespective of what the market price may be.
Strike price is one of the key determinants of the price of the derivative. For call options, those with higher strike prices options are normally priced lower than those with lower strike price, while for put options it is the opposite.
The strike price determines whether the option is in the money or out of the money.
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