CFDs are a leveraged product and can result in losses that exceed deposits. Trading CFDs may not be suitable for everyone, so please ensure you fully understand the risks and take care to manage your exposure.

Strike definition

A - B - C - D - E - F - H - I - L - M - N - O - P - R - S - T - U - V - W

See all glossary trading terms

In options trading, the strike is the price at which a contract can be exercised, and the price at which the underlying asset will be bought or sold. It is also known as the strike price.

If the option is a call, then when the underlying asset hits the strike price it can be bought. If the option is a put, then hitting the strike price means the underlying asset can be sold. In order for an option to be exercised, it must reach its strike price before its expiration date. The more the asset price moves beyond the strike price, the more profit is derived from the option.

When the underlying asset in an option matches its strike price, the option is known as being at the money. When it exceeds the strike price, it is in the money.

Strike price compared to current market is a key determining factor in the premium charged for an option. Other key factors are time to expiry and volatility of the underlying asset.

Contact us

Our office is open 5 days a week, Sunday to Thursday from 8am to 7pm. Support line is available 24hrs a day from 12pm Saturday to 2am Saturday (UAE time).

+971 (0) 4 559 2108

You can also email us at: helpdesk.ae@ig.com

 

CFDs are a leveraged product and can result in losses that exceed deposits. Trading CFDs may not be suitable for everyone, so please ensure you fully understand the risks and take care to manage your exposure.