Strike Price (Options) Explained - Derivatives

In finance, the exercise price of an option is the fixed price at which the holder of the option may buy or sell the underlying security or commodity (in the case of a call) at a fixed price, or in this case sell it as a put. Alternatively, it may be set at a discount or premium, or it may be determined by the spot price above or below the market price of an underlying security or commodity currency on the day the options are excluded. The price exercised is a fixed discount/premium and is subject to a number of factors, including market conditions, interest rates and other factors. 

Money is the value of a financial contract when the contract is executed financially, and trading is based on contracts requiring delivery to the underlying instrument. 

In options trading, terms such as money, money and money - money describe the moneyworthiness of an option. More specifically, it is the value of the underlying option security or the price of that security in monetary terms. 

A call option is money if the strike price is above the market price of the underlying shares. Put options, on the other hand, are not money unless the issue price is above or below the market price for the underlying share. 

A call warrant is excluded if the exercise price is above or below the market price of the underlying shares. Put options, on the other hand, are not money unless the issue price or strike price is equal to or higher than the closing price. A call and a put option can be linked to money if both the share price and the strike price are equal or close together. Call options cannot be excluded unless the price exercised is below or close to the market price for the existing basic share. Put options must be excluded until and to the extent that the strike price was above and near or at or slightly above and/or equal to or lower than the market price.

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