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StrikePath teaches options with live examples on made-up markets. Free, no sign-up.

What is an option's strike price, in plain words?

The strike is the price at which the option's buyer can buy the stock (with a call) or sell it (with a put) 1. It sets whether an option has intrinsic value: a call is in the money when the stock is above its strike, a put when the stock is below 2.

A $50 stock and its calls and puts with 30 days left at 30% implied volatility (made-up numbers), one row per strike. Move the stock.

Source: the StrikePath engine, pricing with the Black–Scholes formula 3 at 4.3% interest a year; a simulated example, not market prices. For learning; not advice.

Strike and price

Premiums generally rise as an option moves further into the money and fall as it moves out 2. With the stock at $50, the formula gives $2.98 for the $48 call and $0.99 for the $52 call; $0.81 for the $48 put and $2.80 for the $52 put 3.

Near and far strikes

An option further out of the money costs less 2 and needs a bigger move in the stock to end in the money. A bought call's net price is its strike plus the premium 4; the pages on break-even and on cheap options show it with numbers.

What this shows, and what it doesn't

Model prices for one volatility and no dividend. In real markets each strike trades at its own implied volatility 5.

Go further

What is the break-even price of an option? →Strike plus or minus the premium.Are cheap out-of-the-money options a good deal? →What a far strike buys.
Sources (5), checked 20 October 2026 and 27 October 2026
  1. US Securities and Exchange Commission, Investor.gov, “An Introduction to Options” (investor bulletin, updated 16 July 2026). Read it (read 20 October 2026)
  2. The Options Industry Council, “Options Pricing”. Read it (read 27 October 2026)
  3. Fischer Black and Myron Scholes, “The Pricing of Options and Corporate Liabilities”, Journal of Political Economy 81(3), 637–654, 1973. Read it (read 20 October 2026)
  4. The Options Industry Council, “Exercising Options”. Read it (read 27 October 2026)
  5. CME Group, “Implied Volatility”. Read it (read 20 October 2026)

Now try it on a scenario of your own

Pick where a simulated stock might be, and by when: drag one dot and see, side by side, what buying shares, one option, or a pair of options (a call or put spread) would each do. Free, no sign-up.

Check a trade before you make it →