Strike Price

The strike price refers to the price at which an investor has the right to buy or sell an underlying security in an options contract. The financial exchanges determine the value of the strike price, which may be based on the spot price of the underlying security at the time the option is acquired. For instance, if an investor purchases a $20 monthly call option to buy bitcoin (BTC) at $75,000, the strike price of the contract is $75,000. This allows the investor to exercise the option and buy the cryptocurrency at that price before the contract expires.