In dealing with options,the strike price is:
A)the price that the parties negotiate the option price when the option is exercised.
B)the set price at which the option is exercised.
C)not relevant.
D)set by the seller of the currency subject to the option.

Question

Quizplus · Accepted Answer

The strike price is the predetermined price at which the holder of an option can buy or sell the underlying asset (in this case, currency) if they choose to exercise the option. It is set at the time the option contract is created and is relevant in determining the potential profit or loss of the option holder.

In Dealing with Options,the Strike Price Is