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What is the Exercise Price?

The exercise price represents the price at which the holder of a call option can buy the underlying instrument from the option seller, or the price at which the holder of a put option can sell the underlying instrument to the option seller.

Example:

Underlying instrument: Siemens
Contract size: 100 shares
Exercise price: EUR 80
Lifetime: Third Friday in September 2012
Option type: Call
Option premium: EUR 4.80

 

The holder of this option has the right to buy the shares at a price of EUR 80 per share.

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