Strike price refers to the predetermined price at which an option can be exercised. In the context of options trading, an investor has the right, but not the obligation, to buy or sell an asset at this price before the option expires.For calls, the strike price is where the buyer can purchase the underlying asset, while for puts, it is where the holder can sell it. Understanding the strike price is crucial for making decisions about options contracts.If the market price moves favorably beyond the strike price for a call option, the option holder can profit by exercising the option. Conversely, if the market price falls below the strike price for a put option, exercising the option allows the holder to sell at a higher price than the market offers.Choosing the right strike price can significantly impact potential gains or losses, as it determines the break-even point on any options trade. Therefore, it is a critical consideration for traders looking to leverage options for investment strategies.