strike price : strike price is nothing but related maket price particular script for an underlying assets .this strike prices set by the stock exchange .............. by , sumanth choudary
The strike price of a stock option, is a fixed price at which the owner of the stock can either buy or sell at. The strike price is a key variable in a derivatives contract between two people.
The strike price is the heart of the futures market. If you are dealing in puts, the strike price is the price below which the option exercises. If I sell a put on Acme at $10, I can be required to buy the security if it falls to $9.95. In calls, if the share price goes above the strike price the option exercises--if I sell a call on Acme at $10, the option executes if the share price hits $10.05.
The strike price and exercise price in options trading are the same thing. They refer to the price at which the option holder can buy or sell the underlying asset.
The strike price for options is determined based on factors such as the current market price of the underlying asset, the volatility of the asset, and the time until the option expires. Traders and investors analyze these factors to choose a strike price that they believe will be profitable if the option is exercised.
I think it's the same
Selling call options below the strike price can be profitable if the options expire worthless or if the stock price stays below the strike price. This strategy allows you to keep the premium received from selling the options as profit. However, there is a risk of potentially unlimited losses if the stock price rises significantly above the strike price. It is important to carefully consider your risk tolerance and market outlook before engaging in this strategy.
Options that are "at the money" have a strike price that is equal to the current market price of the underlying asset, while options that are "in the money" have a strike price that is below the current market price of the underlying asset.
A butterfly put spread is an options trading strategy that involves buying one put option at a lower strike price, selling two put options at a middle strike price, and buying one put option at a higher strike price. This strategy can be used to profit from a specific range of price movement in the underlying asset, with the maximum profit occurring if the asset's price stays close to the middle strike price at expiration.
Nothing. Once you enter into a put contract, the strike price remains the same. If the stock price goes over the strike price and stays there until expiration, you just let the put expire.
To buy a call option, you pay a premium to the option seller for the right to buy a specific stock at a predetermined price (strike price) before a certain date (expiration date). If the stock price rises above the strike price before the expiration date, you can exercise the option and buy the stock at the lower strike price, potentially making a profit.
If the spot price of the stock exceeds the "strike price" in the call option, the option is in-the-money and you can exercise it. But if you have a choice, wait to exercise it until the stock's spot price exceeds the strike price enough to cover the premium. Example: the strike price is $40 and the premium was $2. In order to make money on this option, the stock price needs to be over $42--enough to pay for the stock and replace the money you spent buying the option.
Exercising a put option involves the holder selling the underlying asset at the strike price before the option's expiration date. This allows the holder to profit if the asset's price falls below the strike price.