What is an exercise price?

The exercise price is the price at which an underlying security can be purchased or sold when trading a call or put option, respectively. It is also referred to as the strike price and is known when an investor initiates the trade.

What is in-the-money exercise price?

In-the-money exercise price refers to a situation where the exercise price for a call option is below the current market price of the underlying asset, or where the exercise price for a put option is above the current market price. ITM options have intrinsic value.

What is the difference between exercise price and put option?

In the case of a call option, the right is there with the option holder to purchase the underlying security at the exercise price up to the date of expiration. In contrast, in the case of the put option, at the exercise price, there is a right to the option holder to sell the underlying security. What is Exercise Price (Strike Price)?

What is exercise price (strike)?

One key characteristic of an option contract is the agreed upon price, known as the strike price or exercise price. The strike price is the predetermined price at which you buy (in the case of a call) or you sell (in the case of a put) an underlying futures contract when the option is exercised.