Glossary · Options
Strike price
The price at which an option can be exercised.
The strike (exercise) price is the fixed price written into the contract. For a call, it is the price you may buy at; for a put, the price you may sell at.
Where the strike sits relative to the current market price determines moneyness — in the money, at the money, or out of the money — and heavily influences premium size. Closer-to-the-money strikes usually cost more because they have a higher chance of finishing valuable.
Example
Stock trades at $72. A call with a $70 strike is in the money; a call with a $80 strike is out of the money.