Strike Price

Q: Why does Strike Price matter?

Liquidity, pin risk, and dealer gamma cluster at popular strikes (round numbers, max pain folklore).

Q: What is a practical case for Strike Price?

Monthly OPEX with huge open interest at a round strike. Spot gravitates as dealers hedge; the strike was a magnet, not a target from fundamentals.

Q: How should I read Strike Price?

Quote moneyness in delta or % to spot. A $100 strike means nothing without the spot and the tenor.

The strike is the contract price at which an option can be exercised — the hinge of moneyness and of the payoff kink.

Definition

K is fixed in the contract (adjust for corporate actions). Calls are ITM when S > K; puts when S < K. Distance to K in percent or in delta is how desks talk moneyness, not the raw dollar strike across names.

Why it matters

Liquidity, pin risk, and dealer gamma cluster at popular strikes (round numbers, max pain folklore).

Case

Monthly OPEX with huge open interest at a round strike. Spot gravitates as dealers hedge; the strike was a magnet, not a target from fundamentals.

How to read it

Quote moneyness in delta or % to spot. A $100 strike means nothing without the spot and the tenor.

Memory

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Define Strike Price in plain language. Then say why it matters and give one short case. If evidence is thin, say what is missing — do not invent a trading playbook.

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