The strike price (or exercise price) of an option is the price per share at which the owner of the option can buy (call option), or sell (put option), the underlying security.
The strike price may be set by reference to the spot price (market pricemarket price) of the underlying security or commodity on the day an option is taken out, or it may be fixed at a discount or at a premium.
In finance, theThe strike price (or exercise price) of an option is the fixedprice priceper share at which the owner of the option can buy (incall the case of a calloption), or sell (input the case of a putoption), the underlying security or commodity. The strike price may be set by reference to the spot price (market price) of the underlying security or commodity on the day an option is taken out, or it may be fixed at a discount or at a premium.
The strike price may be set by reference to the spot price (market price) of the underlying security or commodity on the day an option is taken out, or it may be fixed at a discount or at a premium.
When granting employee options, the company sets the strike price at the fair market value of the company. An important factor in determining the fair market value is a value recommendation given by a third party firm called a 409A valuation.
In finance, the strike price (or exercise price) of an option is the fixed price at which the owner of the option can buy (in the case of a call), or sell (in the case of a put), the underlying security or commodity. The strike price may be set by reference to the spot price (market price) of the underlying security or commodity on the day an option is taken out, or it may be fixed at a discount or at a premium.