The price that must be paid by a security holder in order to convert a convertible security. The exercise price is also referred to as the strike price. If an option holder's exercise price is $.50, then the option holder must pay the company $.50 in order to exercise the option and purchase common stock. If a warrant holder has an exercise price of $2.25, then the warrant holder must pay the company $2.25 to exercise the warrant and thereby exchange the warrant for common stock. The exercise price can be nominal ($.001) or significant, and frequently relates to the purchase price of another security purchased in the same offering or at the same time.