Option premium

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Option premium

Option Premium

The price one pays to buy an option contract, whether it is a call or a put, when one is the first buyer. That is, when the option is written, its first buyer pays the option premium. It should not be confused it with the strike price, which is the price one would pay for the underlying asset, should the option be exercised.

option premium

See premium.

Option premium.

When you buy an option, you pay the seller a nonrefundable amount, known as the option premium, for the right to exercise that option before it expires.

If you sell an option, you receive a premium from the buyer. In fact, collecting the premium is often one motive for selling options, including those you anticipate will expire without being exercised.

An option premium is not a fixed amount, and typically increases as the option moves in-the-money and decreases if it doesn't move in-the-money.

However, factors such as the price and volatility of the underlying instrument, current interest rates, and the amount of time left before the option expires also affect the premium price.

You can look at the current range of premium prices in the Options Quotations tables in newspapers or on options websites, such as the Options Clearing Corporation (OCC) website.

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Option Prices (Yen) Prices (Yen) (Mar) UP/DN (Apr) UP/DN Put 14,500 20 DN 50 250 DN 110 15,000 120 DN 170 440 DN 150 15,500 530 DN 30 770 DN 130 Call 14,500 605 UP 255 760 UP 185 15,000 190 UP 115 460 UP 145 15,500 35 UP 25 235 UP 85 Volume: Put 26,422
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