What is strike price?Strike

The price written into an option contract at which you can buy or sell.

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Learn “strike price” in an animated lesson

Hedging Strategies
Hedging with Options: Protective Puts and Collars
Futures lock in both sides; options only block the bad side. See how much it costs to "insure" a stock, and how to save on the premium.
Advanced Option Strategies
Calendar Spreads: Profiting from Different Decay Speeds
Sell a near-month option and buy a far-month option at the same strike. The near month's time value melts fast and the far month's slowly; if the stock sits near the strike, that speed difference is your profit.
Advanced Option Strategies
The Volatility Smile and Skew
For the same stock and expiration, different strikes have different implied volatilities. Downside puts on stocks are often pricier: the market charges extra for "crash" insurance.
Options Basics
Call Options
Buying a call: pay a premium to lock in the right to buy at the strike. Drag the price at expiration and watch the payoff curve "bend".
Options Basics
Intrinsic Value and Time Value
An option's price splits into two parts: what it's worth right now, and what it's worth because there's still time left.
Options Basics
Option Leverage and the Risk of Going to Zero
One call costs a fraction of the stock price yet shares in the gains on 100 shares. But if the stock doesn't rise enough, it goes to zero. Compare the returns of buying stock vs. buying a call.
Options Basics
In, At and Out of the Money
Drag the stock price and watch a call and a put with the same strike flip between in the money and out of the money.
Options Basics
Reading an Option Chain
That big T-shaped table in your trading app: strikes in the middle, calls on the left, puts on the right, each cell with a bid and an ask. Learn to pick out the contract you want.
Options Basics
Put Options
Buying a put: the right to sell at the strike, like "insurance against a fall". The lower the stock goes, the more it's worth.
Options Basics
The Option Seller
The seller of an option gets paid up front but takes on an obligation. Compare the risks of a short call and a short put.
Options Basics
Strike, Premium and Expiration
Take apart an option contract and see what's written on it: underlying, type, strike price, expiration date, premium and multiplier.
Options Basics
What Is an Option?
Pay a small amount now for the right to buy (or sell) at an agreed price later. Think of it like a deposit on a house.
Options: Next Steps
Cash-Secured Puts: Buying Stock at a Discount
Set aside the cash to buy the stock, then sell a put and collect the premium up front. If the price doesn't drop, you keep the money; if it does, you buy a stock you wanted anyway at a cost of strike − premium.
Options: Next Steps
Covered Calls: Collecting Rent on Your Shares
You already hold 100 shares, so you sell 1 call to collect a premium. If the stock doesn't rise you earn extra income; if it soars, your shares get bought at the strike. You trade upside for cash.
Options: Next Steps
The Four Basic Positions
Compare long call, short call, long put and short put side by side, and tweak the payoff curves in real time.
Options: Next Steps
LEAPS Call vs. Short-Dated Call
For the same rise in the stock, why do a 30-day option and a 730-day LEAPS behave so differently?

Related terms

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Go to “Hedging with Options: Protective Puts and Collars”