What is strike width?
In one line: Strike width is the gap between the strike prices listed on an options chain, such as $1, $2.50 or $5, which sets how closely you can pick a strike.
How it works
Look down an Options chain and the strikes step in fixed gaps: $44, $45, $46, or $40, $45, $50. That gap is the strike width. You may also see it called strike spacing or the strike interval.
Exchanges set it. Cheaper stocks often have $0.50 or $1 strikes. Pricier ones may have $2.50, $5 or $10. Popular names often get extra strikes, so even a high-priced stock can have $1 steps near the price. Strikes far from the price, and far-off dates, often have wider gaps.
"Strike width" can also mean the gap between the two strikes in a spread. That's about risk in a spread. This page is about picking a single strike.
An example (hypothetical)
Two stocks both trade at $50 (an illustration, not a trade idea). You'd buy either one at about $47.
| Stock | Strikes near $47 | Your choice | If it ends at $40 |
|---|---|---|---|
| AAA ($1 strikes) | $46, $47, $48 | $47 put for $0.90 | Assigned: −$610 |
| BBB ($5 strikes) | $45, $50 | $45 put for $0.70 | Assigned: −$430 |
| BBB ($5 strikes) | $45, $50 | $50 put for $2.40 | Assigned: −$760 |
With $1 strikes, you get the price you wanted. With $5 strikes, you must go lower than planned, with less premium, or higher, with more risk. Neither is wrong. But "close enough" can move your break-even by dollars. A math example, not a promise.
Why it matters for sellers
In the wheel strategy, you pick strikes at prices you'd truly buy or sell at. Wide strikes force a compromise, so decide in advance which way you'll round. Many sellers round toward more room: a lower put strike, a higher call strike.
Strike width also hints at where the trading is. Round strikes, like $45 and $50, often carry more Open interest and tighter spreads than the in-between ones. A $47 strike that exists but barely trades may cost more to get in and out of than a busy $45. Check Options liquidity on the exact strike, not just the stock.
Questions
Why does my stock only have $5 strikes?
Exchanges set strikes based on the stock's price and how much its options trade. Higher-priced or less-traded names often get wider gaps.
Are $1 strikes better?
They give more choice. But a strike that barely trades can have a wide spread. Choice only helps if the strike is liquid.
Does strike width change?
Exchanges can add strikes as the price moves or interest grows, mostly near the current price.
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