The exercise price of an index option is the level of the underlying index reported as its exercise settlement value. The amount of cash, if any, that you are entitled to receive upon exercise or expiration of an option is the difference between the strike price ( The price specified in an option contract. For a call, it's the price at which the option holder can buy a stock; for a put, it's the price at which the option holder can sell the stock. ) of the option and the exercise price, generally multiplied by $100. If you hold a call (An option that grants the right to buy a given stock at a given price (the strike price) during a given period of time. The call holder profits if the market price rises higher than the strike price. ) and the underlying index value is above the strike price, you can exercise the option and receive the exercise settlement amount. If you hold a put ( An option that grants the right to sell a given stock at a given price (the strike price) during a given period of time. The put holder profits if the market price goes below the strike price. ) and the underlying index value is below the strike price, you can exercise the option and receive the exercise settlement amount.

For example, if you hold a call for index options with a strike price of $1,000, and the exercise price is $1,010, you can exercise the option and receive $1,000 (a difference of $10 multiplied by 100).