The strike price, also known as the exercise price, is the predetermined price at which an option holder can buy (in the case of a call option) or sell (in the case of a put option) the underlying asset when exercising the option. It is a critical element in options trading as it directly influences the option's intrinsic value and is essential for determining whether an option is in-the-money, at-the-money, or out-of-the-money. Understanding strike price helps in making informed trading decisions regarding financial derivatives.
congrats on reading the definition of Strike Price. now let's actually learn it.