Exercise Price

The exercise price, also known as the strike price, is the fixed price at which an option holder can buy or sell the underlying asset—such as stocks—when they choose to exercise the option. For example, if you have a call option with an exercise price of $50, you can buy the stock at that price, regardless of its current market value. The exercise price is set when the option is granted and helps determine whether exercising the option is financially advantageous, depending on current market conditions.