Strike or exercise price: denotes the price at which the buyer of the option has a right to purchase or sell the underlying. Five different strike prices will be available at any point of time. The strike price interval will be of 10 (nifty). If the index is currently at 1,400, the strike prices available will be 1,380, 1,390, 1,400, 1,410, 1,420. This price is fixed by the exchange for the entire duration of the option depending on the movement of the underlying stock or index in the cash market.
For stocks, strike price intervals vary from Rs.5/- to Rs.20/- depending on the base value of the stock.
In-the-money: A Call Option is said to be "In-the-Money" if the strike price is less than the market price of the underlying stock. A Put Option is In-The-Money when the strike price is greater than the market price.
Out-of-the-Money: A Call Option is said to be "Out-of-the-Money" if the strike price is greater than the market price of the stock. A Put option is Out-Of-Money if the strike price is less than the market price.
At-the-Money: The option with strike price equal to that of the market price of the stock is considered as being "At-the-Money" or Near-the-Money.