The strike price of an option is:
A)The market price at the time the option is written.
B)The market price at the time the option is exercised.
C)The price at which the option holder has the right to buy or sell.
D)Always above the market price.

Question

Quizplus · Accepted Answer

The strike price, also known as the exercise price, is the price at which the option holder has the right to buy or sell the underlying asset. It is defined at the time the option is written and remains fixed regardless of any changes in the market price. The strike price can be above or below the market price, depending on whether it is a call or a put option.

The Strike Price of an Option Is