Strike price
strike
The price at which an option holder can exercise the right to buy (call) or sell (put) the underlying.
Options with strike near the current spot price are At-The-Money (ATM (at-the-money)); above-spot calls and below-spot puts are Out-of-The-Money (OTM (out-of-the-money)); their inverses are In-The-Money (ITM (in-the-money)).
Related terms
- OptionA derivative giving the holder the right (not obligation) to buy ([[call-option]]) or sell ([[put-option]]) at a fixed price by expiry.
- ATM (at-the-money)An option whose strike is approximately equal to the current underlying price — pure time value, no intrinsic.
- ITM (in-the-money)An option that has positive intrinsic value — call strike below spot, or put strike above spot.
- OTM (out-of-the-money)An option with no intrinsic value — call strike above spot, or put strike below spot.