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Exercise price
Exercise priceThe price at which the security underlying an options contract may be bought or sold. RELATED TERMS-------------------------------------- Price The cost of a good or service to the consumer. Security Piece of paper that proves ownership of stocks, bonds, and other investments. Underlying 1) In derivatives, the security that must be delivered when a derivative contract, such as a put or call option, is exercised. 2) In equities, the common stock that must be delivered when a warrant is exercised, or when a convertible bond or convertible preferred share is converted to common stock. Contract A term of reference describing a unit of trading for a financial or commodity future. Also, the actual bilateral agreement between the buyer and seller of a transaction as defined by an exchange. SIMILAR TERMS-------------------------------------- Exercise To implement the right of the holder of an option to buy (in the case of a call) or sell (in the case of a put) the underlying security. Exercise limit Cap on the number of option contracts of any one class of contract that can be exercised within a five-day period contract. Exercise notice A broker's notification from a client who wants to exercise a right to buy or sell (depending on the type of contract) the underlying security of the option contract. Exercise price or strike price of an option The price at which the holder may buy or sell the underlying security. Exercise settlement amount The difference between the exercise price of the option and the exercise settlement value of the index on the day an exercise notice is tendered, multiplied by the index multiplier. Exercise value The value of an in the money option if it was exercised today (before the expiration date). For a call option, this is the difference between the current asset price and the stike price. For a put option, it is the difference between the strike price and the current asset price. Exercising the option The act of buying or selling the underlying asset via the option contract. PREVIOUS AND NEXT TERMS-------------------------------------- Exempt securities Instruments exempt from the registration requirements of the Securities Act of 1933 or the margin requirements of the SEC Act of 1934. Exemption Direct reductions from gross income allowed by the IRS. Exercise To implement the right of the holder of an option to buy (in the case of a call) or sell (in the case of a put) the underlying security. Exercise limit Cap on the number of option contracts of any one class of contract that can be exercised within a five-day period contract. Exercise notice A broker's notification from a client who wants to exercise a right to buy or sell (depending on the type of contract) the underlying security of the option contract. Exercise price Exercise price or strike price of an option The price at which the holder may buy or sell the underlying security. Exercise settlement amount The difference between the exercise price of the option and the exercise settlement value of the index on the day an exercise notice is tendered, multiplied by the index multiplier. Exercise value The value of an in the money option if it was exercised today (before the expiration date). For a call option, this is the difference between the current asset price and the stike price. For a put option, it is the difference between the strike price and the current asset price. Exercising the option The act of buying or selling the underlying asset via the option contract. Exhaust price The low price at which a broker must liquidate a client's holding in a stock purchased in a margin account in order to meet a margin call when the client cannot meet the call. We thank you for using the Financial Dictionary to search for Exercise price. If you have a better definition for Exercise price than the one presented here, please let us know by making use of the suggest a term option. This definition of Exercise price may be disputed by other professionals. Our attempt is to provide easy definitions on Exercise price and any other medical topic for the public at large.
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