Glossary · from the DESK dictionary
Strike
The price set in an option contract at which the underlying can be bought or sold.
In plain words
The strike is the option's "finish line" — the price that must be above (for calls) or below (for puts) the current price for the option to have value.
In more detail
The strike price, together with the underlying's current price, determines whether an option is in-the-money, at-the-money, or out-of-the-money. Options chains usually offer several strikes at fixed intervals.
Example
For a call with a $100 strike and a current price of $105, the option is $5 in the money.
What it means for traders
The choice of strike substantially determines premium, delta, and the risk/reward profile of an options position.
Common pitfalls
Strikes further out of the money are cheaper, but less likely to expire with any value.
Related terms
Aggregate Exercise Price · At-the-Money (ATM) · Call Option · Exercise · Intrinsic Value · Option Contract
From the DESK dictionary. For information only, not investment advice.
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DESK is a research tool and not investment advice. Page generated: 2026-10-12.