Options Trading Tutorial

How is the strike price determined ?

Public Comments

1. It's set by the market makers. They use a drawn out mathematical formula only an artful mathematician could understand. http://en.wikipedia.org/wiki/Strike_price
2. The strike price for an option is chosen by the seller of the option. Everything else is determined from that price. Each exchange stock generally has defined trade-able option strike prices, so you will generally see many of them at the same strike price.