Strike Price
The fixed price at which an option's holder may buy or sell the underlying if the option is exercised.
Formula
Test: the strike is set by the exchange in standard intervals and does not change over the contract's life
Unit
₹
In depth
Strikes are listed by the exchange in fixed intervals around the current level — 50 points apart for the Nifty in the near strikes — and they never move, which is what makes an option's payoff computable. The distance between the strike and the current price determines almost everything about the contract: its premium, its delta, its probability of finishing in the money, and how fast its time value decays. Far out-of-the-money strikes are cheap precisely because they are unlikely to pay anything, a relationship beginners consistently misread as good value. Choosing a strike is the central decision in any option position and is usually more consequential than choosing the direction.
Worked example
With the index at 24,000, a 24,000 call might cost 300 while a 24,600 call costs 70. The cheaper option needs a 2.8% move to reach its strike at all, and 3.1% to break even.
Illustrative figures, chosen so the arithmetic is easy to follow. Not a live price and not a valuation of any company.
Educational reference only
This entry explains what “Strike Price” means. It is not investment advice and not a recommendation to buy or sell any security. Any numbers above are illustrative, not live prices, and nothing here predicts price direction or rates a stock. Consider your own circumstances and consult a SEBI-registered investment adviser before acting.