Question
The price specified on an option that the holder can
buy or sell the underlying asset is called the:Solution
In options trading, the strike price is the predetermined price at which the holder of the option can buy or sell the underlying asset. The underlying asset can be a stock, a commodity, a currency, or any other financial instrument. If the holder of a call option exercises the option, they have the right to buy the underlying asset at the strike price. On the other hand, if the holder of a put option exercises the option, they have the right to sell the underlying asset at the strike price. Â
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