What Is the Significance of the “Strike Price” in Options?

The Strike Price, or exercise price, is the fixed price at which the option holder can buy (Call) or sell (Put) the underlying asset upon exercising the option. It is determined when the contract is initiated.

The relationship between the strike price and the current market price determines the option's "moneyness" (In-the-Money, At-the-Money, or Out-of-the-Money) and thus its intrinsic value.