Exercise Price
The price at which option contract can be exercised and the underlying security can be bought (if it is a call option) or sold (if it is a put option).
In order to profit from options, i.e. in a case of call option, difference between exercise price and the “spot price” (the market price at the time option is exercised) should be greater. But, greater the difference, the greater the premium is required for buying the option.
Exercise Price is also called “Strike Price.”
| Related Terms: Subscription Price |
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