exercise price investment & finance definition
The
price at which the underlying security for an options contract can be
purchased. If the exercise price of an option is $35, then the stock can be
purchased at $35 a share, irrespective of the current market price. Also called
strike price.
See exercise price in Wall Street Words
The dollar price at which the owner of a warrant or an option can force the writer to sell an asset (in the case of a call option or warrant) or to buy an asset (in the case of a put option). The exercise price is set at the time the option is issued and, except for unusual instances that include warrants, remains constant until the option expires. A market price of an asset above, or expected to be above, an option's exercise price gives the option value. See also
aggregate exercise price,
step-up.
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