Options Trading Tutorial

what does strike price mean in call and put options?

Hello, I am playing Cashflow 202 (a game about investing). I was wondering what does the strike price mean in a call and put option?

Public Comments

1. Strike price refers to the price the call and put options come into play. Options are rights to buy or sell stock at a specified price. The strike price is the specified price.
2. Buying an option gives you the right to purchase or sell the stock at the strike price. Strike price of a call is the price at which you purchase the stock. Strike price of a put is the price at which you sell the stock. For example, $45 call strike price (have the right to buy at $45) $40 put strike price (have the right to sell at $40)