What term describes the price at which an option can be exercised?

The term that describes the price at which an option can be exercised is known as the strike price. This is a key concept in options trading, as it determines the price at which the holder of the option can buy (in the case of a call option) or sell (in the case of a put option) the underlying asset. The strike price is crucial for evaluating the potential profitability of an option, as it allows traders to assess whether exercising the option will be advantageous compared to the current market price of the underlying asset.

Market price refers to the current trading price of an asset in the market, while premium price refers to the cost of purchasing an option itself, which is the price the buyer pays to acquire the option. Settlement price is the final price of an asset determined at the end of a trading session, which is primarily used for futures and derivatives. Each of these terms serves a different purpose in financial markets, but the strike price is specifically related to the exercise of options.