Strike Price

The Strike Price, also known as the exercise price, is the fixed rate at which the holder of a foreign exchange (FX) option contract has the right, but not the obligation, to buy or sell the underlying currency pair upon the option's expiration or exercise date. This predetermined rate is the critical determinant of an option's intrinsic value and whether the contract is "in-the-money" (ITM) or "out-of-the-money" (OTM) relative to the current spot rate.