What is a strike price?
Derivatives
A strike price is the fixed price at which an options contract allows the buyer to buy (call) or sell (put) the underlying stock, agreed upon when the contract is created.
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Whether an option is profitable depends on where the stock’s actual market price ends up relative to the strike price at or before expiry. Traders choose strike prices based on their view of the stock and how much risk (premium cost) they’re willing to take on.
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