striking price: meaning, definition, pronunciation and examples
lowformal, technical, business
Quick answer
What does “striking price” mean?
The fixed price at which the owner of an option contract can buy or sell the underlying asset.
Audio
Pronunciation
Definition
Meaning and Definition
The fixed price at which the owner of an option contract can buy or sell the underlying asset.
In finance, it is the predetermined price specified in an options contract at which the holder can exercise the option to buy (call) or sell (put) the underlying security. It is also synonymous with 'exercise price' or 'strike price.'
Dialectal Variation
British vs American Usage
Differences
Both varieties use the term identically. 'Strike price' is more common in American financial media, while 'exercise price' is also frequently used in both. The term 'striking price' is slightly more formal.
Connotations
Neutral technical term. No significant connotative differences.
Frequency
Equally low-frequency in specialized financial contexts in both varieties.
Grammar
How to Use “striking price” in a Sentence
The striking price [is/was] [set/determined] at [amount].An option with a striking price of [amount].to exercise the option at the striking priceVocabulary
Collocations
Usage
Meaning in Context
Business
Crucial term in options trading, derivatives markets, and financial reports. E.g., 'The call option has a striking price of $50.'
Academic
Used in finance, economics, and business studies textbooks and papers on derivative instruments.
Everyday
Virtually never used in everyday conversation outside of investment contexts.
Technical
A precise term in financial engineering, options pricing models (e.g., Black-Scholes), and regulatory documents.
Vocabulary
Synonyms of “striking price”
Vocabulary
Antonyms of “striking price”
Watch out
Common Mistakes When Using “striking price”
- Using it to refer to a bargain price or a special offer in retail (e.g., 'a striking price for a car').
- Confusing it with the current trading price of a stock.
- Using 'striking' as a verb in this context (e.g., 'The price was striking').
FAQ
Frequently Asked Questions
Yes, they are completely synonymous in finance. 'Strike price' is more commonly used in everyday market parlance.
No, the striking price is fixed for the duration of the option contract and does not change.
The option is said to be 'at the money.' Exercising it would result in no immediate profit or loss from the price difference, excluding the cost of the option premium.
The striking price is set by the options exchange when the contract is first listed and is typically based on the current market price of the underlying asset at that time, rounded to a standard interval.
The fixed price at which the owner of an option contract can buy or sell the underlying asset.
Striking price is usually formal, technical, business in register.
Striking price: in British English it is pronounced /ˈstraɪkɪŋ praɪs/, and in American English it is pronounced /ˈstraɪkɪŋ praɪs/. Tap the audio buttons above to hear it.
Learning
Memory Aids
Mnemonic
Think of a boxer 'striking' at a specific target. The 'striking price' is the specific, pre-agreed price you 'strike' or act upon when you exercise your option.
Conceptual Metaphor
FINANCIAL CONTRACTS ARE GAMES WITH RULES (The price is a fixed rule/target in the 'game' of the option contract).
Practice
Quiz
What does the 'striking price' in an options contract define?