Option Exercise Price
Content
Definition
The Option Exercise Price is the price at which an option holder can purchase (call option) or sell (put option) the underlying security.
Usage and Context
Frequently asked questions
- What does option exercise price mean? The option exercise price is the predetermined price at which the holder of an option can buy (in the case of a call option) or sell (in the case of a put option) the underlying security.
- What is the price at which the option is exercised called? The price at which the option is exercised is called the exercise price or strike price.
- What is the price at which option is exercised known as? The price at which an option is exercised is known as the exercise price or strike price.
Benefits
The option exercise price allows investors to lock in a purchase or sale price, providing the potential for profit if the market price moves favorably.
Conclusion
The Option Exercise Price is the set price at which an option holder can buy or sell the underlying security, playing a key role in the profitability of options trading.
