Senior Investment Guide: Identifying Investment Risks
The strike price, or exercise price, of an option is the specified share price at which the
shares of stock can be bought or sold by the holder, or buyer, of the option contract if
he exercises his right against a writer, or seller, of the option. To exercise your option
is to exercise your right to buy (in the case of a call) or sell (in the case of a put) the
underlying shares at the specified strike price of the option.
The strike price for an option is initially set at a price which is reasonably close to the
current share price of...
