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The options markets · lesson 3 of 20
Strike, expiry and premium
Every option is defined by three elements. The exercise price, or strike, is the price at which the underlying can be bought or sold. The expiry is the last day on which the right is valid.
The premium is the price of the option, paid by the buyer to the seller. It is formed on the market like the price of a share and changes all the time.
For the same underlying many options are listed, with different strikes and expiries. The monthly expiries of equity options fall on the third Friday of the month, but there are also weekly and daily expiries.
Questions
1. What is the strike?
The price at which the underlying can be bought or sold
It is the exercise price.
2. Who pays the premium, and to whom?
The buyer to the seller
The premium is the price of the right.
3. When do the monthly expiries of equity options fall?
On the third Friday of the month
There are also more frequent expiries.
Continue from lesson 4
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This page in other languages
- Strike, scadenza e premio (Italiano)
- Prix d'exercice, échéance et prime (Français)
- Strike, Fälligkeit und Prämie (Deutsch)
- Strike, vencimiento y prima (Español)
- Strike, vencimento e prêmio (Português)
- Страйк, срок истечения и премия (Русский)
- 行权价、到期日与权利金 (中文)
- 権利行使価格、満期、プレミアム (日本語)
- स्ट्राइक, समाप्ति और प्रीमियम (हिन्दी)
- 행사가격, 만기, 프리미엄 (한국어)
- Kullanım fiyatı, vade ve prim (Türkçe)
- Strike, jatuh tempo, dan premi (Bahasa Indonesia)
- سعر التنفيذ والاستحقاق والعلاوة (العربية)
- Giá thực hiện, ngày đáo hạn và phí quyền chọn (Tiếng Việt)
- Strike, termin wygaśnięcia i premia (Polski)