{"id":12255,"date":"2026-05-22T13:39:31","date_gmt":"2026-05-22T13:39:31","guid":{"rendered":"https:\/\/lemonn.co.in\/blog\/glossary\/strike-price\/"},"modified":"2026-05-22T13:39:31","modified_gmt":"2026-05-22T13:39:31","slug":"strike-price","status":"publish","type":"glossary","link":"https:\/\/lemonn.co.in\/blog\/glossary\/strike-price\/","title":{"rendered":"Strike Price"},"content":{"rendered":"<p>The <a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/strike-price\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">strike price<\/a> &#x2014; also called the exercise price &#x2014; is the predetermined price at which the holder of an option can buy (for a call) or sell (for a put) the underlying asset. It is one of the four core elements of every <a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/options-contract\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">options contract<\/a>, alongside the underlying, expiry and <a class=\"glossaryLink\"  href=\"https:\/\/lemonn.co.in\/blog\/glossary\/premium\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'  tabindex='0' role='link'>premium<\/a>. Choosing the right strike is one of the most important decisions an options trader makes in Indian markets.<\/p>\n<div><strong>Key takeaways:<\/strong>\n<ul>\n<li>Strike is the fixed transaction price defined by the option contract.<\/li>\n<li>Strikes are set by the exchange in standard intervals (e.g., every 50 points on <a class=\"glossaryLink\"  href=\"https:\/\/lemonn.co.in\/blog\/glossary\/nifty\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'  tabindex='0' role='link'>Nifty<\/a>).<\/li>\n<li>Distance from spot determines whether the option is ITM, ATM or OTM.<\/li>\n<li>Strike selection affects premium, probability of profit and <a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/leverage\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">leverage<\/a>.<\/li>\n<li>In Indian markets, strikes for Nifty extend in 50-point steps and Bank Nifty in 100-point steps.<\/li>\n<\/ul>\n<\/div>\n<h2 id=\"strike-intervals-and-availability\">Strike intervals and availability<\/h2>\n<table>\n<tr>\n<th>Underlying<\/th>\n<th>Strike Interval<\/th>\n<\/tr>\n<tr>\n<td>Nifty 50<\/td>\n<td>50 points<\/td>\n<\/tr>\n<tr>\n<td>Bank Nifty<\/td>\n<td>100 points<\/td>\n<\/tr>\n<tr>\n<td>FinNifty<\/td>\n<td>50 points<\/td>\n<\/tr>\n<tr>\n<td><a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/stock-options\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">Stock options<\/a><\/td>\n<td>2.5%&#x2013;5% of spot, by tier<\/td>\n<\/tr>\n<\/table>\n<h2 id=\"how-strikes-interact-with-spot-price\">How strikes interact with spot price<\/h2>\n<ul>\n<li><strong>ATM (At The Money):<\/strong> Strike closest to current spot &#x2014; highest premium time value.<\/li>\n<li><strong>ITM (In The Money):<\/strong> Strikes that already have <a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/intrinsic-value\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">intrinsic value<\/a> (call strike below spot, put strike above spot).<\/li>\n<li><strong>OTM (Out of The Money):<\/strong> Strikes without intrinsic value &#x2014; pure time value.<\/li>\n<li><strong>Deep ITM\/OTM:<\/strong> Strikes far from spot &#x2014; used in special strategies.<\/li>\n<\/ul>\n<h2 id=\"strike-selection-trade-offs\">Strike selection &#x2014; trade-offs<\/h2>\n<p>Different strikes serve different goals:<\/p>\n<ul>\n<li><strong>ATM:<\/strong> Balanced delta and theta; common for directional bets and straddles.<\/li>\n<li><strong>OTM:<\/strong> Cheaper, lower probability of profit, higher leverage if it hits.<\/li>\n<li><strong>ITM:<\/strong> Higher premium, lower leverage, behaves more like a futures position.<\/li>\n<\/ul>\n<h2 id=\"examples\">Examples<\/h2>\n<p>Spot Nifty 22,000. The 22,000 call is ATM. The 22,100 call is slightly OTM; the 21,900 call is slightly ITM. ITM premiums include intrinsic value (spot &#x2212; strike, here &#x20B9;100 for the 21,900 call). OTM call premiums are entirely time value.<\/p>\n<h2 id=\"strike-selection-in-different-scenarios\">Strike selection in different scenarios<\/h2>\n<table>\n<tr>\n<th>Scenario<\/th>\n<th>Preferred strike<\/th>\n<\/tr>\n<tr>\n<td>Strong directional view, short expiry<\/td>\n<td>ATM or slightly ITM<\/td>\n<\/tr>\n<tr>\n<td>Cheap leverage on uncertain news<\/td>\n<td>OTM<\/td>\n<\/tr>\n<tr>\n<td>Pure delta exposure<\/td>\n<td>Deep ITM (acts like futures)<\/td>\n<\/tr>\n<tr>\n<td>Selling premium for income<\/td>\n<td>OTM (collect time value)<\/td>\n<\/tr>\n<\/table>\n<h2 id=\"common-mistakes\">Common mistakes<\/h2>\n<ul>\n<li>Buying very far OTM strikes simply because they are cheap.<\/li>\n<li>Ignoring strike distance vs daily expected move (use ATR or <a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/implied-volatility\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">implied volatility<\/a>).<\/li>\n<li>Failing to compare strikes across expiries for the best risk-reward.<\/li>\n<li>Selling deep ITM strikes without accounting for assignment risk.<\/li>\n<\/ul>\n<h2 id=\"frequently-asked-questions\">Frequently asked questions<\/h2>\n<div>\n<h3 id=\"can-the-exchange-add-new-strikes-intraday\">Can the exchange add new strikes intraday?<\/h3>\n<p>Yes &#x2014; if a large move requires more strikes for <a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/liquidity\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">liquidity<\/a>, the exchange adds them automatically.<\/p>\n<h3 id=\"which-strike-has-the-highest-premium\">Which strike has the highest premium?<\/h3>\n<p>Deep ITM strikes have the highest absolute premium because of intrinsic value; ATM has the highest time value.<\/p>\n<h3 id=\"does-strike-interval-change-for-stocks\">Does strike interval change for <a class=\"glossaryLink\"  href=\"https:\/\/lemonn.co.in\/blog\/glossary\/stocks\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'  tabindex='0' role='link'>stocks<\/a>?<\/h3>\n<p>Yes &#x2014; strike intervals are tiered by stock price. Higher-priced stocks have wider intervals.<\/p>\n<h3 id=\"what-is-the-difference-between-strike-and-exercise-price\">What is the difference between strike and exercise price?<\/h3>\n<p>They are synonymous in the Indian context.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>The strike price &#x2014; also called the exercise price &#x2014; is the predetermined price at which the holder of an option can buy (for a call) or sell (for a put) the underlying asset. It is one of the four core elements of every options contract, alongside the underlying, expiry and premium. Choosing the right [&#x2026;]<\/p>\n","protected":false},"author":3,"featured_media":0,"menu_order":0,"template":"","meta":{"_uag_custom_page_level_css":"","footnotes":""},"class_list":["post-12255","glossary","type-glossary","status-publish","hentry"],"blocksy_meta":[],"uagb_featured_image_src":{"full":false,"thumbnail":false,"medium":false,"medium_large":false,"large":false,"1536x1536":false,"2048x2048":false,"web-stories-poster-portrait":false,"web-stories-publisher-logo":false,"web-stories-thumbnail":false},"uagb_author_info":{"display_name":"Ashutosh","author_link":"https:\/\/lemonn.co.in\/blog\/author\/ashu\/"},"uagb_comment_info":0,"uagb_excerpt":"The strike price &#x2014; also called the exercise price &#x2014; is the predetermined price at which the holder of an option can buy (for a call) or sell (for a put) the underlying asset. It is one of the four core elements of every options contract, alongside the underlying, expiry and premium. Choosing the right&hellip;","_links":{"self":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/glossary\/12255","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/glossary"}],"about":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/types\/glossary"}],"author":[{"embeddable":true,"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/users\/3"}],"version-history":[{"count":0,"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/glossary\/12255\/revisions"}],"wp:attachment":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/media?parent=12255"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}