Strike price or exercise price
The price at which the option contract allows buying/selling the underlying.
Quick facts
| Field | Value |
|---|---|
| Category | Options Trading Terminology |
| Use | Learn vocabulary to read chains and manage risk |
Definition
Strike selection shapes delta, cost, and payoff. ATM strikes typically have higher sensitivity; OTM strikes are cheaper but need a larger move; ITM strikes cost more but behave more like the underlying.
Quick example
Info
Example: A 100 strike call gives the right to buy at 100 (regardless of current market price).
Where you’ll see it
- Option chain (strikes/expiries/OI/volume)
- Order window (market/limit/SL)
- Positions page (P&L and Greeks)
Common confusion
Avoid treating a single term as a “signal”. Terms help you describe risk; decisions should come from a complete plan (view, sizing, exits, and liquidity).
Summary
- The price at which the option contract allows buying/selling the underlying.
- Use this term to communicate risk and intent clearly.