Aggregate Exercise Price

Posted in Finance, Accounting and Economics Terms, Total Reads: 563

Definition: Aggregate Exercise Price

The strike price/ option price/ exercise price multiplied by the total number of underlying securities in the contract gives the value of Aggregate Exercise Price. In other words the Aggregate Exercise Price gives the money equivalent required to exercise the option.

For example. A December call option on 100 shares of ABC co at Rs 90 will, have an aggregate exercise price of Rs 9,000[100 times Rs 90], if it is exercised on or before the December expiration date.


However some conditions must be taken into consideration:

• In stock option trading the price of the option, also known as the premium, is a separate figure which should not be included in the aggregate exercise price.


• In options traded on debt instruments, like government bonds, Treasury bills, Treasury notes, Treasury bonds, and certain municipal bonds, the aggregate exercise price is calculated by the product of Face Value of the underlying security by the exercise price.


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