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Finance Glossary

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Strike Price

Definition:

The price at which you may strike—whaBAM!—lightning fast. It's the price on an option where you can either buy or sell the security. WhaBAM! (We just like saying that.)

Example

You have a stock trading at $14 a share. You were a lucky employee to have joined before the IPO and you received stock options with a strike price of a dollar a share. You can say that you are $13 in the money based on the stock trading here at $14. In practice, to buy your Beemer, you would execute what's called a same day sale with your broker who would remit to you the difference from the strike price to the actual clearing price or 13 bucks. Then go 325i.

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