Brian Lee
Jul 25, 2025
Option strike price is the predetermined level where the stock can be bought or sold if the option is exercised. For calls, it's the price you'd pay to buy the shares. For puts, it's the price you can sell them for.
Beginners should view the strike as the target the stock needs to reach for the option to finish in the money. A call with a strike of \(50\) lets you purchase the stock at \(50\), no matter how high the market price climbs before expiration. Lower strike prices make calls more expensive because they have a better chance of being reached.
Strike selection often goes hand in hand with measures like Option Delta to gauge the probability of hitting that target.