# Aggregate Exercise Price

## Definition

The term aggregate exercise price refers to the strike price of an option multiplied by the number of securities in the contract.  The aggregate exercise price does not consider any premium paid, or received, on the option.

### Calculation

Aggregate Exercise Price = Strike Price of Option x Contract Size

Note:  There are 100 shares of stock in a typical option contract.

### Explanation

The aggregate exercise price tells the investor how much money is paid, or received, if the shares are purchased or sold.  For example, if an employee of Company ABC is awarded stock options that allow her to receive 1,000 shares of stock at \$10.00 per share, the aggregate exercise price of this option is 1,000 x \$10.00, or \$10,000.  The aggregate exercise price calculation does not take into consideration premiums paid, or received, on the option.

The aggregate exercise price of a debt instrument is determined by taking the exercise price of the option and multiplying it by the face value of the underlying security (bond).

exercise price