1The price fixed by the seller of a security after receiving bids in a tender offer, typically for a sale of bonds or a new stock market issue.
- If the price of the stock falls below the strike price, the put seller will have to purchase shares from the put buyer when the option is exercised.
- In 1999 he was issued 400,000 at a strike price of $28.23.
- If your stock price tumbles below the strike price, these losses will be offset by gains in the put option.
2The price at which a put or call option can be exercised.
- The drawback of a fence is that it limits the gains of a futures price rise to the strike price of the call option sold.
- Say you own a call option with a strike price of 90 that expires in two weeks.
- Finally, both put and call options would be at the money when the strike price and underlying expire at the exact same price.
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