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Strike price or exercise price

The specific price for which an Option is purchased. The buyer gets the right to exercise his Option at this Price.

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The stated price per quantity for which the underlying asset may be purchased (in the case of a call) or sold (in the case of a put) by the option buyer (holder) upon exercise of the option contract.

Strike price is the price which the buyer specualte. 

Example:

1. Infosys shares are being tradered at Rs 1100 per share.

A trader specualtes that the price of Infosys could reach Rs 1200 in next 1 month. This Rs 1200 is the strick price at which the buyer could purchase a 'call option' of Infosys.

 

2. TCS Current Share Price: Rs 3000

A trader specuate that the price of TCS share may fall to Rs 2500 because of issues in management. This Rs 2500 is the strike price for at which the buyer could buy a 'put' option of TCS.

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