The strike price of an option is:
A)the value of the underlying asset at expiration.
B)the price of the option.
C)the proceeds generated if today was the expiration day.
D)the price at which an investor can buy or sell the underlying asset.

Question

Quizplus · Accepted Answer

The strike price of an option is the price at which an investor can buy or sell the underlying asset. It is also known as the exercise price. This is the price at which the option holder has the right, but not the obligation, to buy or sell the underlying asset. The strike price is agreed upon at the time of the option contract and remains fixed throughout the life of the option.

The Strike Price of an Option Is