The higher the existing spot price relative to the strike price, the less
valuable the call options will be.
A strike price is a set price at which a derivative contract can be bought or sold when it is exercised. For call options, the strike price is where the security can be bought by the option holder; for put options, the strike price is the price at which the security can be sold. The strike price is also known as the exercise price.
The strike price is the price at which a derivative contract can be bought or sold. The value of a derivative is based on its underlying asset. The strike price, also known as the exercise price, is the key determinant of option value.
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