Strike Price definition

Strike Price is a term used in options trading. Strike Price is the price at which you have the right (but not obligation) to buy the stock (if you bought a call) or sell the stock (if you bought a put) within specified period of time.

For example, say today is March, and you buy May (of the same year) Call Option to buy 1000 shares of ABCD at 25 (the Strike Price). That means that you have a right (but not obligation) to buy 1000 shares of ABCD at $25 per share until the end of 3rd friday of May (options expire on third friday of every month).

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