The strike price is the price that the underlying asset referenced in a future or option contract must achieve in order for the holder to execute the contract. When the ...DashboardDashboardProfileProfileSupportSupportGlossarySStrikepriceStrikepriceStrikepriceisamoneytermyouneedtounderstand.Here’swhatitmeans.#ABCDEFGHIJKLMNOPQRSTUVWXYZWhatisstrikeprice?Strikeprice,alsoknownasexercisepriceorgrantprice, isakeyconceptfor derivatives.Thestrikepriceisthepricethat theunderlyingassetreferencedinafutureoroptioncontractmust achieve inorderfortheholderto executethe contract.Whenthestrikepriceisachieved,theholdermayeitherbuyorselltheunderlyingasset.DeeperdefinitionThevalueofderivativescontractsis “derived”fromunderlyingassetssuchas stocks,bonds,indexesorcommodities.Atthe simplestlevel,aderivativecontractisadealbetweentwopartiestoexchangetheunderlyingassetifthepriceoftheassetachievesanagreed-uponlevelatsomepointinthefuture.Thisfuturepriceisreferredtoasthestrikepriceortheexerciseprice.Strikepricemostoftenappliestooptions.Thewriterofanoptionscontractagreestobuyorsellanunderlyingassetonceitachievesthestrikeprice.Therearetwokindsofoptions:callsandputs.Putsgivetheholderwhobuystheoption theright,butnottheobligation,tosellassets tothewriteroftheoptiononcetheagreed-uponstrikepriceisreached.Callsaretheopposite:holdershavetheright,butnottheobligation,tobuyassetsifthestrikepriceisreachedbeforeexpiration.Strikepricesrepresentstockvalueatthetimeoftheirsale.Thoughstrikepricesaredeterminedwhenthecontractisfirstwritten,changingfactors,likemarketpricefluctuationsandprofitpershare,impactthevalueatthetimethatthestrikepriceisexercised.Strikepricesaremostoftengranted inincrementsof$2.50.Strikepriceandoptionpriceareinverselyrelated.Whenastrikepriceishigh,thecalloptionislowandtheputoptionishigh.Likewise,whenthestrikepriceislow,thecalloptionishighandtheputoptionlow.Ifastockisvaluable,whenthestrikepriceislowerthanthecurrentmarketprice,itisconsidered“inthemoney.”Whenthestrikepriceishigherthanthecurrentm