What Does Aggregate Exercise Price Mean?
Aggregate Exercise Price refers to the total price which comes when the contract size is multiplied by the option strike price. This aggregate price is used for determining the dollar amount that is required in case the option (Put or Call) is to be exercised.
How Is Aggregate Exercise Price Applied in Options Market?
The application is as follows. Just an illustration, if a company XYZ has 500 shares as the contract size and $100 as the strike price, the aggregate exercise price would be worked out as $100*500 which works out to $50,000.
For calculating aggregate exercise price for a bond option, the multiplication of underlying bond’s face value is done with exercise price.
Tags: Aggregate Exercise Price, strike price
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