Strike Price
Also: base value, exercise price, strike price
The strike price is the standardised reference price of a precious metal on which premiums, dealer margins and option contracts are built.
In precious metals trading, the strike price (also referred to as the base or reference price) is the price on which all further price components are built. Depending on the context, the term has two closely related meanings: in physical trading it is synonymous with the spot price – that is, the current market price for immediate delivery. In derivatives trading (options, futures), "strike price" denotes the pre-agreed exercise price at which a buyer or seller has the right to trade the precious metal.
Base Price in Physical Precious Metals Trading
When buying gold bars or silver coins, the base price forms the starting point of the calculation. Dealers add the premium (agio) on top, which covers manufacturing and distribution costs as well as a profit margin. The resulting formula is:
Dealer price = Base price (spot) + Premium (€ or %)
The base price itself is determined continuously on the international commodity exchanges – in particular the LBMA in London and COMEX in New York – and quoted in US dollars per troy ounce. You will find current values on the gold price page.
Strike Price for Options and Forward Transactions
In the derivatives area, the strike price sets the rate at which an option may be exercised:
- Call option: the right to buy the precious metal at the strike price
- Put option: the right to sell the precious metal at the strike price
If the current market price of a call option is above the strike price, the option is "in the money". The historical price trend shows how strongly base prices can deviate from agreed strike prices.
Distinction from Related Terms
| Term | Meaning |
|---|---|
| Base price / spot | Current market price, immediate delivery |
| Buying price | Price the dealer pays the seller (below spot) |
| Dealer price | Price the buyer pays the dealer (above spot) |
| Spread | Difference between buying and selling |
| Strike price | Agreed exercise price for derivatives |
The melt value – the pure material value without a premium – can be determined directly in the calculator.
Note: Statements about the tax treatment of gains from derivative transactions on precious metals do not constitute tax or investment advice.
In Brief
The strike or base price is the foundation of every precious metal transaction: it reflects the current market value and serves both as a starting point for premiums in physical trading and as an agreed exercise price in the derivatives area. Anyone who knows the base price can competently interpret dealer prices, premiums and option premiums.