The Strike Price is the price at which a derivative contract (Example: an option contract) can be exercised.
For the options market, a call strike price is the price at which the underlying security can be bought (at or before the expiration date).
Regardless of the underlying security price, you can exercise your option and buy the underlying security at any moment (for an American option) at the strike price.
A put strike price is the price at which the underlying security can be sold (at or before the expiration date).
The strike price is one of the most important variables that influence the option price or premium. The other variables include Time until expiration date, volatility of the underlying asset, dividends and interest rates.
Trading financial instruments, including foreign exchange on margin, carries a high level of risk and is not suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in financial instruments or foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading and seek advice from an independent financial advisor if you have any doubts.
