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Option terminology
Strike price is the price where an underlying stock can be purchased. This is the price where a stock price must go above (for calls) or go below (for puts) before a position can be exercised for a profit. The exercise must occur before the expiration date. Each listed option represents 100 shares of company stock, known as a contract.
For call options, the option is said to be in-the-money if the share price is above the strike price. A put option is in-the-money when the share price is below the strike price. For call options, the option is said to be out-the-money if the share price is below the strike price. A put option is out-the-money when the share price is above the strike price. In-the-money, if share price is equal to strike price.
The total cost (the price) of an option is called the premium. This price is determined by factors including the stock price, strike price, time remaining until expiration (time value), and volatility.



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