The "daily Call" From Option Alpha: Options Trading | Stock Options | Stock Trading | Trading Online

Hey everyone. This is Kirk here again from Option Alpha and welcome back to the daily call. Today, we’re going to be answering the question, “How are options strike prices determined?” Options strike prices determined are basically opened by the exchanges where the options contracts are traded. In a more typical fashion, you might see the CBOE which is CBOE start to open different option contract months and different strike prices depending on how much activity or demand they would expect for that underlying contract. Now, this is why you see in some cases for lower-priced ETFs and lower-priced stocks, you see option strike prices in increments of $1 or even sometimes, $.5, so 41 and then 41.5 as a strike price versus some of the larger contracts on regular ETFs or even stocks where you might see $5, $10, $20, $25 increments in the option strike prices and again, this is mostly based on just how much demand there is and how much variety is needed in the marketplace. But you will start to see option strike pri