Question
What is strike price in options?
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10th Nov 2009 by JonB
I've seen quite a few explanations how strike prices work, and they all seem to me to be overly complex and complicating. A strike price is simply the price at which you can buy a stock (in a call option) or sell a stock (with a put option). That's it. If you buy 1 contract of july calls struck at $15.00, or july $15's, that just means that, until expiration in July, you have the right to buy 100 shares of a stock for $15 each.
I've seen quite a few explanations how strike prices work, and they all seem to me to be overly complex and complicating. A strike price is simply the price at which you can buy a stock (in a call option) or sell a stock (with a put option). That's it. If you buy 1 contract of july calls struck at $15.00, or july $15's, that just means that, until expiration in July, you have the right to buy 100 shares of a stock for $15 each.
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9th Nov 2009 In Derivatives
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Subjects: options,