How Is the “Strike Price” of an Option Determined Using an Oracle?

The strike price of an option is typically set when the contract is created and is not determined by the oracle. However, the oracle is crucial for determining the underlying asset's price at the time of expiration or settlement.

The smart contract uses the oracle's price feed at the settlement time to compare it against the pre-determined strike price, which then dictates whether the option is "in the money" and how it should settle.