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Finance Glossary

Just call us Bond. Amortized bond.

Over 700 finance terms, Shmooped to perfection.

Exercise Price


It's not about how much you pay to get in to your gym. It's the strike price of the stock option you own. So if you buy an option to buy a stock at a specific price, that specific price is the exercise price (a.k.a. the strike price). 


Let's say you joined in its infancy. You were granted 100,000 options at a $2 strike price. It's now publicly traded on NASDAQ. The stock just hit $40. You can exercise your options, paying $2 to to buy out that share of stock, and then sell it for $40 through your broker to net $38 in gain per share. The $2 you pay to buy the stock as you exercise the option is the exercise price.