what is a strike price

A strike price, also known as an exercise price, is a fixed price at which the owner of an option can buy or sell the underlying security or commodity. For call options, it is the price at which the security can be bought, while for put options, it is the price at which the security can be sold. The strike price is a key variable in a derivatives contract and determines the option's "moneyness," which is the difference between the strike price and the current trading price of the underlying security