Exercise price is the price at which you exercise your options to either buy or sell the underlying security, depending on whether it is a call or put option. (A call option gives you the right but not the obligation to buy shares. A put option gives you the right but not the obligation to sell shares.) Traders often call the exercise price the "strike" price. For example, a stock option that is a call option that has an exercise price of $20 gives you the right to buy shares for $20. If the option is currently "in-the-money," you can turn around and sell the shares at a higher market price for a profit. If the option is "out-of-the-money," the market price of shares is lower than the price you pay for them. You can sell the shares profitably at a later date if the market price rises above the price you paid for them.