Strike Price
The strike price is the fixed price at which an option lets its holder buy (call) or sell (put) the underlying.
The strike is set when the contract is listed and never changes. It anchors an option’s payoff: a call has intrinsic value when the underlying is above the strike, a put when it is below.
Strikes are listed at regular intervals (often $1, $2.50, or $5 apart) around the current price, giving traders a ladder of risk/reward choices.
Example. With the stock at $103, a 100-strike call is $3 in-the-money, while a 105-strike call is $2 out-of-the-money.
FAQ
Can the strike price change?
No — the strike is fixed for the life of the contract, though corporate actions like splits can adjust it proportionally.
How do I choose a strike?
Lower-cost out-of-the-money strikes need a bigger move to pay off; in-the-money strikes cost more but behave more like the stock (higher delta).