Strike price
The strike price is the price at which an option lets you buy (call) or sell (put) the asset. How far the strike is from the current price largely sets what the option costs.
How it works
The strike is fixed when the option is opened and does not change until expiry. For one expiry date there is usually a ladder of strikes, for example every $1,000 for BTC, and you choose which one to trade.
Options are grouped by where the strike sits. In the money (ITM): a call with a strike below the price or a put with a strike above it, so the option already has intrinsic value. At the money (ATM): the strike is near the current price. Out of the money (OTM): a call with a strike above the price or a put with a strike below it, with no intrinsic value yet.
Choosing a strike is a trade-off between cost and odds. OTM options are cheaper but expire worthless more often. ITM options cost more but move more like the asset itself. When hedging with a put, the strike tells you the level where protection starts.
BTC is at $62,000. A call with a $60,000 strike is in the money, with $2,000 of intrinsic value. A $62,000 call is at the money, and a $70,000 call is out of the money: for it to pay at expiry, BTC must rise above $70,000 plus the premium paid.
The beginner mistake is picking a strike by the option's price instead of by where the asset can realistically get before expiry. First estimate a plausible range (implied volatility helps), then choose the strike and work out breakeven including the premium.
Questions and answers
What is a strike price in simple terms?
It is the price written into the option at which you can buy or sell the asset. Whether that is a good deal depends on where the market price ends up.
What does in the money and out of the money mean?
In the money is an option that would pay if exercised right now: a call with a strike below the price or a put with a strike above it. Out of the money has no such value yet.
How do I choose a strike price?
It depends on the goal. For a bet on a strong move traders pick a strike near the price or slightly out of the money; for a hedge, the level below which they do not want to lose. Far strikes are cheap but rarely pay.
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Updated: 2026-10-19