Strike Price

The strike price is the pre-determined price at which an option holder can buy (for a call option) or sell (for a put option) the underlying asset. It plays a major role in determining an option’s value. Options that are in the money (ITM) have a strike price that favors the trader, while those out of the money (OTM) require a bigger market move to become profitable. Traders select strike prices based on risk tolerance, market outlook, and strategy goals.

For example, in the image below, the “strike” of the highlighted contract (read as $NSP 65P 2/21/2025) is “$65”. So, this is the $NSP $65 put strike, expiring on February 21, 2025.