New Enroll in RBI Grade B New Batch - Starts on May 21

    Question

    The price specified on an option that the holder can buy

    or sell the underlying asset is called the:
    A Premium Correct Answer Incorrect Answer
    B Call Correct Answer Incorrect Answer
    C Strike price Correct Answer Incorrect Answer
    D Put Correct Answer Incorrect Answer
    E Target price Correct Answer Incorrect Answer

    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.

    Practice Next

    Relevant for Exams: