How Is the ‘Strike Price’ Relevant to an Option’s Intrinsic Value?

The Strike Price, or exercise price, is the fixed price at which the option holder can buy or sell the underlying asset. It is the benchmark against which the current market price is compared to determine if the option has intrinsic value.

Intrinsic value is the immediate profit if the option were exercised. For a call, intrinsic value exists if the market price is above the strike price.