Financial Dictionary
Exercise Price
The price at which the underlying security can be purchased (call option) or sold (put option). Determined at the time the option contract is formed and also known as the "strike price".
Investopedia Commentary
The exercise price is the key to profiting from options. A difference between the fixed exercise price and the market price at the time the option is exercised is what gives it value. Generally, the greater the difference between the exercise and market price at the time an option contract is written, the higher the premium required to purchase the option.
Related Links
Options Basics Tutorial
Introduction to Put Writing
See also: Adjusted Exercise Price, Call, Contract Size, Exercise, Option, Put, Strike Price
