TLDR:
The strike price (also called exercise price) is the fixed price at which the holder of an option can buy (call) or sell (put) the underlying asset, determining whether the option is “in the money” or “out of the money.”
Strike Price and Option Valuation
The financial value of a stock option depends critically on the relationship between the strike price and the current (or future expected) stock price. The Black-Scholes model (and its variations) prices options based on: current stock price, strike price, time to expiration, risk-free interest rate, and implied volatility. For employee stock options with long terms (10 years) and high-growth underlying stocks, the option value can be multiples of the intrinsic value alone. This is why options with strike prices even slightly in the money can have substantial present value.