An Option Strike Price, also known as the exercise price, is the price at which the holder of an option contract can buy or sell the underlying asset. The strike price is determined at the time the option contract is issued and is specified in the contract.There are two types of options: call options and put options. A call option gives the holder the right to buy the underlying asset at the strike price, while a put option gives the holder the right to sell the underlying asset at the strike price.For example, if an investor buys a call option on a stock with a strike price of $50, they have the right to buy that stock at $50, regardless of the current market price. If the stock price goes above $50, the option holder can exercise their option and buy the stock at $50, potentially making a profit. If the stock price stays below $50, the option holder may choose not to exercise the option and let it expire worthless.The strike price also can be used to determine the intrinsic value of an option, which is the difference between the strike price and the current market price of the underlying asset.Strike prices are usually quoted in increments, such as $5 or $10, and are usually listed in a series of strike prices known as strike price intervals. These strike price intervals are usually determined by the market conditions and the underlying asset.In summary, the option strike price is the price at which an option holder can buy or sell the underlying asset, and it's determined at the time the option contract is issued. It can be used to determine the intrinsic value of an option and also it's used in the strike price intervals.
