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....