Futures & options
What is Strike price?
Also called: ITM, ATM, OTM
Hinglish mein padhein: Strike price kya hota hai?
The strike price is the fixed price at which an option can be exercised. Options are in, at or out of the money depending on where the market is.
A call is in the money (ITM) when the market is above the strike; a put is ITM when the market is below. At the money (ATM) options have strikes near the current price.
Out-of-the-money (OTM) options are cheap because they are likely to expire worthless.
Related terms
- Options (call and put)An option gives the buyer the right, but not the obligation, to buy (call) or sell (put) at a strike price before expiry. The seller takes the obligation.
- Option premiumThe premium is the price of an option. It is made of intrinsic value (how much it is in the money) plus time value.