Can someone please explain the difference between strike and spot notional? in the context of equity options trading?


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Suppose one owns $n$ call options with a strike price of $K$ on stock X and each option gives the right to buy $c$ shares of X. Also assume the spot price for stock X is $P$. Then, for this position (or trade):

Strike notional $ = n \times c \times K$,

Spot notional $ = n \times c \times P$.


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