Strike Price

Strike price refers to the dollar amount that an individual or organization needs to pay to exercise their stock option, and is calculated based on the 409(a) valuation of the company. The strike price an employee pays is outlined in their stock option grant, which outlines the number of shares they are entitled to purchase, the vesting schedule, and the price they need to pay to purchase the shares (strike price). The strike price paid for a single option grant remains the same regardless of its exercise date, even if the company’s value increases significantly.

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