Definition
The SEC distinguishes the exercise price from the premium paid for an option right.[27](#source-cm-options) The strike concerns the terms of a possible action involving the underlying asset or a cash equivalent; the premium is the price of the right itself. A position relative to the strike is not a ready result after costs.
What to check
For calls and puts, positive intrinsic value arises from different relationships between price and strike. Even a positive payoff may not cover the premium paid. Check the multiplier, style, underlying measure and exercise method. The OIC distinguishes exercise from a closing transaction and notes procedural terms.[29](#source-cm-exercise) One strike without a series and expiry does not identify a contract. The [payoff and profit table](/guides/call-put-payoff-profit/) uses fictional one-unit values and does not recommend an options position.