{"id":3590,"date":"2018-11-26T15:46:34","date_gmt":"2018-11-26T15:46:34","guid":{"rendered":"https:\/\/www.wasteyourtime.co\/?page_id=3590"},"modified":"2020-07-16T08:49:15","modified_gmt":"2020-07-16T07:49:15","slug":"strike","status":"publish","type":"page","link":"https:\/\/traders-paradise.com\/magazine\/trading-dictionary\/s\/strike\/","title":{"rendered":"Strike"},"content":{"rendered":"<h4><b>DEFINITION of strike<\/b><\/h4>\n<p><span style=\"font-weight: 400;\">The strike is also known as the <\/span><b><i>strike price<\/i><\/b><span style=\"font-weight: 400;\">. This is one of the most important elements of options pricing. That means that an option has a fixed price at which the owner of the option can buy, or sell the underlying security or commodity. <\/span><\/p>\n<h4><b>WHAT IT IS IN ESSENCE<\/b><\/h4>\n<p>It may be set by reference to the spot price of the underlying security or commodity on the day an option is taken out. Or it may be fixed at a discount or at a premium.<\/p>\n<p><span style=\"font-weight: 400;\">At the expiration date, the difference between the stock\u2019s market price and the options this price represents the amount of profit that the option gains.\u00a0<\/span><\/p>\n<p>In options trading, that means,\u00a0the price at which a contract can be exercised. And the price at which the underlying asset will be bought or sold.<\/p>\n<p>It is a key variable in a derivatives contract between two parties. Where the contract requires delivery of the underlying instrument, the trade will be at that price.<\/p>\n<p>Regardless of the market price of the underlying instrument at that time.<br \/>\n<i><\/i><\/p>\n<p><strong><i>If the option is a call, in the situation when the underlying asset hits this price it can be bought.<\/i><\/strong><br \/>\n<i><\/i><\/p>\n<p><strong><i>If the option is a put, then hitting the strike price means the underlying asset can be sold.<\/i><\/strong><\/p>\n<h4><b>HOW TO USE<\/b><\/h4>\n<p><span style=\"font-weight: 400;\">In order for the option to be exercised, the strike price must be reached before its expiration date. The more the asset price moves beyond the strike price, the more profit is taken from the option.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">When the underlying asset in an option matches its strike price, the option is known as being at the money. When it exceeds this price, it is in the money.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Compared to the current market it is a key determining factor in the premium charged for an option. Other key factors are a time to expiry and volatility of the underlying asset.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>DEFINITION of strike The strike is also known as the strike price. This is one of the most important elements of options pricing. That means that an option has a fixed price at which the owner of the option can buy, or sell the underlying security or commodity. WHAT IT IS IN ESSENCE It may [&hellip;]<\/p>\n","protected":false},"author":4,"featured_media":7232,"parent":3046,"menu_order":15,"comment_status":"closed","ping_status":"closed","template":"","meta":{"content-type":"","_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"footnotes":""},"class_list":["post-3590","page","type-page","status-publish","has-post-thumbnail","hentry"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Strike | Financial Dictionary | Traders Paradise<\/title>\n<meta name=\"description\" content=\"The strike is also the strike price. 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