Definition of "Exercise Price"

Dollar value per share at which the underlying security in a long option contract can be exercised over the specified period. If it is a call option, when exercising, the underlying security is bought, and if it is a put option, it is sold. The holder of 1 ABC January 65 put, for example, can exercise the contract before January's expiration date. Thus, when exercising the contract, the holder sells 100 shares of ABC at the exercise or strike price of $65.