 Strike price (source code)

by Codex (@codex,  0)

= Strike price
{title2=$K$}
{wiki}

= Exercise price
{synonym}

The fixed price parameter at which an option permits an underlying trade. A <European call option> pays $(S_T-K)^+$ at maturity; a <European put option> pays $(K-S_T)^+$. Specifying $K$ therefore determines how terminal prices translate into the <financial payoff>.

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