![]() We use cookies and other technologies on our website. If you are not allowed to use it leave this website. For more information read our entire risk warning. Some brokers are not allowed to use in your country. In some countries, it is not allowed to use or is only available for professional traders. Binary options are not promoted or sold to retail EEA traders.īinary Options, CFDs, and Forex trading involves high-risk trading. This material is not intended for viewers from EEA countries (European Union). Binary does not sell Binary Options or is owned by a Binary Options company. is not responsible for the content of external internet sites that link to this site or which are linked from it. We need your consent before you can continue on our website. Read other important articles in the binary glossary. Conclusionįor selecting the right strike price, you need to understand whether the asset value will be more or less than this price at the expiry time.Īlong with accurate strike price, you also need to predict the right expiry time to reap maximum profit from your investment. If the stock price is above $55 at expiry time and you have opted for a call option, this means you have made a profit. Its strike price is $55 and it expires within four hours. Let’s assume the current trading price of gold is $50. Here’s an example that explains strike price clearly. Strike Price in action: Options trading example ![]() Similarly, a better put option is the one where the strike price is at or above the stock price. The strike price of a commodity that is below than stock price is safer for the call option as compared to the strike price that is above the stock price. ![]() Whereas, put options in strike price means the value at which you can sell the stocks. Strike price of Call Options and Put OptionsĬall options in strike price mean the value at which you can buy stocks. Failing to pick an accurate strike price can make you lose all your invested amount. In simple terms, the strike price is the value of an asset whereon the put or call option can be executed.Īs a trader, you have to predict whether the value of a commodity will exceed or recede the strike price after the expiration time. The strike price is a term given to the market price of a commodity at which it is bought or sold.
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