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MadMarketScientist

Strike Price Definition

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The concept of the strike price is key to a trade in the options market or in the binary options markets. Whenever a trade is contracted, it is based on a delivery of the security purchased at a pre-agreed price on a future date. This pre-arranged price between the dealer and the trader is known as the strike price. Traders use this price to hedge against future price fluctuations, and dealers use this as a means of guarding against price manipulations by traders on the actual exchanges where the exchange of the physical commodities being traded is done.

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