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What is the option prices and exercise prices in context of options trading ?

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What is the option prices and exercise prices in context of options trading ?
posted Jul 4, 2017 by Deepika Jain

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Option Price
The amount per share that an option buyer pays to the seller. The option premium is primarily affected by the difference between the stock price and the strike price, the time remaining for the option to be exercised, and the volatility of the underlying stock.

Exercise Price
The exercise price is the price at which an underlying security can be purchased (call option) or sold (put option). The exercise price is determined at the time the option contract is formed. The difference between the fixed exercise price, also known as the "strike price," and the market price at the time the option is exercised is what gives it its value.

answer Jul 4, 2017 by Debolina Charaborthy
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