# How Does the Strike Price Affect the Option Premium? ⎊ Path

**Published:** 2025-12-04
**Author:** Greeks.live
**Categories:** Path

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## How Does the Strike Price Affect the Option Premium?

The strike price significantly affects the option premium. Options that are already 'in the money' (ITM) relative to the current market price will have a higher intrinsic value and thus a higher premium.

Options that are 'out of the money' (OTM) have a lower premium because they have no intrinsic value and a lower probability of becoming profitable.

- [How Does the Moneyness (ITM, OTM, ATM) of an Option Affect Its Bid-Offer Spread?](https://learn.greeks.live/path/how-does-the-moneyness-itm-otm-atm-of-an-option-affect-its-bid-offer-spread/)

- [Does Theta Decay Affect ITM Options Differently than OTM Options?](https://learn.greeks.live/path/does-theta-decay-affect-itm-options-differently-than-otm-options/)

- [Define In-The-Money (ITM) for Both a Call and a Put Option](https://learn.greeks.live/path/define-in-the-money-itm-for-both-a-call-and-a-put-option/)

- [What Is the Difference between an ITM, OTM, and ATM Call Option?](https://learn.greeks.live/path/what-is-the-difference-between-an-itm-otm-and-atm-call-option/)

- [What Is the Trade-off between Premium Size and Strike Price Selection?](https://learn.greeks.live/path/what-is-the-trade-off-between-premium-size-and-strike-price-selection/)

- [How Does ‘Time Decay’ (Theta) Affect the Value of an ITM Option Compared to an OTM Option?](https://learn.greeks.live/path/how-does-time-decay-theta-affect-the-value-of-an-itm-option-compared-to-an-otm-option/)

- [Why Does an ITM Option Have a Higher Premium Compared to an OTM Option with the Same Expiration?](https://learn.greeks.live/path/why-does-an-itm-option-have-a-higher-premium-compared-to-an-otm-option-with-the-same-expiration/)

- [How Does ‘Moneyness’ Relate to an Option’s Intrinsic Value?](https://learn.greeks.live/path/how-does-moneyness-relate-to-an-options-intrinsic-value/)

## Glossar

### [Strike Price](https://learn.greeks.live/area/strike-price/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)

Reference ⎊ The Strike Price is the predetermined reference level set at the contract's inception against which the underlying crypto asset's spot price is compared at expiration or exercise.

## Discover More

### [How Does a Rise in BTC IV Affect the Premium of a Call Option?](https://learn.greeks.live/path/how-does-a-rise-in-btc-iv-affect-the-premium-of-a-call-option/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![How Does a Rise in BTC IV Affect the Premium of a Call Option?](https://learn.greeks.live/wp-content/uploads/2025/10/Refraction-Dynamics-of-Glass-Geometric-Constructs-Modeling-Asymmetric-Gamma-Risk-Hedging-in-DeFi-Options.webp)

Higher IV increases the probability of the option finishing in-the-money, thus raising the premium.

### [How Does the Strike Price of an Option Influence Its Price in the Black-Scholes Model?](https://learn.greeks.live/path/how-does-the-strike-price-of-an-option-influence-its-price-in-the-black-scholes-model/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![How Does the Strike Price of an Option Influence Its Price in the Black-Scholes Model?](https://learn.greeks.live/wp-content/uploads/2025/10/Aerodynamic-Propeller-Hub-Design-Modeling-Stochastic-Volatility-Surface-Calibration-Futures.webp)

For calls, a higher strike price means a lower option price; for puts, a higher strike price means a higher option price.

### [Why Might a Trader Choose to Write a Call Option with a Strike Price Close to the Current Spot Price?](https://learn.greeks.live/path/why-might-a-trader-choose-to-write-a-call-option-with-a-strike-price-close-to-the-current-spot-price/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![Why Might a Trader Choose to Write a Call Option with a Strike Price Close to the Current Spot Price?](https://learn.greeks.live/wp-content/uploads/2025/10/Geometric-Portfolio-Rebalancing-Visualization-Utilizing-Orthonormal-Vectors-and-Convex-Hull-Approximation.webp)

To maximize premium income, as ATM options have the highest time value, despite the higher risk of assignment.

### [How Does a High Strike Price Affect the Call Option's Time Value?](https://learn.greeks.live/path/how-does-a-high-strike-price-affect-the-call-options-time-value/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![How Does a High Strike Price Affect the Call Option's Time Value?](https://learn.greeks.live/wp-content/uploads/2025/10/Layered-Positional-Collateral-Structure-Intersecting-Transparent-Delta-Hedging-Mechanism.webp)

A high strike price reduces the call option's time value as it is further OTM.

### [What Is the Term for the Price Difference between the Underlying and the Strike?](https://learn.greeks.live/path/what-is-the-term-for-the-price-difference-between-the-underlying-and-the-strike/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![What Is the Term for the Price Difference between the Underlying and the Strike?](https://learn.greeks.live/wp-content/uploads/2025/10/Layered-Cryptocurrency-Option-Settlement-Stack-Visualization-of-Dynamic-Strike-Price-Convergence-Mechanisms.webp)

The price difference is called moneyness.

### [Define the Terms 'Strike Price' and 'Expiration Date' in the Context of a Tokenized Options Contract](https://learn.greeks.live/path/define-the-terms-strike-price-and-expiration-date-in-the-context-of-a-tokenized-options-contract/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![Define the Terms 'Strike Price' and 'Expiration Date' in the Context of a Tokenized Options Contract](https://learn.greeks.live/wp-content/uploads/2025/10/Teal-Encapsulation-of-Digital-Asset-Securitization-Mechanism-and-Option-Hedging-Exposure.webp)

Strike price is the set execution price; expiration date is the final day to exercise the tokenized option right.

### [Explain How a Change in the Underlying Price Affects the Moneyness of a Fixed Strike Option](https://learn.greeks.live/path/explain-how-a-change-in-the-underlying-price-affects-the-moneyness-of-a-fixed-strike-option/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![Explain How a Change in the Underlying Price Affects the Moneyness of a Fixed Strike Option](https://learn.greeks.live/wp-content/uploads/2025/10/Symmetrical-Crossover-Mechanism-Visualizing-Volatility-Surface-Cross-Sectional-Derivatives-Pricing.webp)

Favorable price movement shifts it ITM; unfavorable movement shifts it OTM relative to the fixed strike.

### [Can ZKPs Be Used to Hide the Strike Price in an Options Contract?](https://learn.greeks.live/path/can-zkps-be-used-to-hide-the-strike-price-in-an-options-contract/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![Can ZKPs Be Used to Hide the Strike Price in an Options Contract?](https://learn.greeks.live/wp-content/uploads/2025/10/Analysis-of-High-Frequency-Trading-Apparatus-Precision-Mechanics-and-Algorithmic-Execution-Pathways.webp)

ZKPs can prove the strike price meets validity criteria (e.g. within range) without revealing the exact value, protecting proprietary trading data.

### [How Does Moneyness Affect the Premium of a Cryptocurrency Option?](https://learn.greeks.live/path/how-does-moneyness-affect-the-premium-of-a-cryptocurrency-option/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![How Does Moneyness Affect the Premium of a Cryptocurrency Option?](https://learn.greeks.live/wp-content/uploads/2025/10/Quantum-State-Collapse-Mechanisms-Governing-Digital-Asset-Volatility-Hedging-Instruments.webp)

The closer an option is to being profitable (in-the-money), the higher its premium will be.

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**Original URL:** https://learn.greeks.live/learn/how-does-the-strike-price-affect-the-option-premium/
