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The predetermined price at which the holder of an option can buy (call) or sell (put) the underlying asset upon exercise.
The strike price determines whether an option is "in the money" (ITM), "at the money" (ATM), or "out of the money" (OTM). A call option with a $50 strike is in the money if the stock trades above $50, at the money if it trades at $50, and out of the money if it trades below $50 (the reverse applies for puts). Options with lower strike prices cost more for calls (more intrinsic value) and less for puts. The choice of strike price reflects the trade-off between cost and probability of profit: lower strike calls cost more but have a higher probability of profit, while higher strike calls are cheaper but less likely to pay off.