Option price


Also found in: Wikipedia.

Option price

Also called the option premium; the price the buyer of the options contract pays for the right to buy or sell a security at a specified price in the future.

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.
References in periodicals archive ?
Charles Holroyd, Executive Director, exercised options granted under the Company's Executive Share Option Scheme over 12,931 ordinary shares of 5p each at an option price of 232p per share.
The money saved can be used to buy shares at an option price set at the start of the scheme.
422, which include, among others, (1) an option price that is greater than or equal to the fair market value (FMV) of the corporation's stock at the time the option is granted and (2) an individual who, at the time the option is granted, does not own more than 10% of the total combined voting power of all classes of stock.
VIENNA, Austria, March 22 /PRNewswire/ -- Telekom Austria (VSE: TKA, NYSE: TKA) announced today, that it has paid EUR 80 million as option price under the call option agreement concluded in December 2004 to purchase MobilTel AD, the leading Bulgarian wireless operator.
VIENNA, Austria, March 22 /PRNewswire-FirstCall/ -- Telekom Austria (VSE: TKA, NYSE: TKA) announced today, that it has paid EUR 80 million as option price under the call option agreement concluded in December 2004 to purchase MobilTel AD, the leading Bulgarian wireless operator.
They simply judge the value of the options as today's spread between fair market value and option price or by assuming a constant rate of increase of, say, 5% or 10% per year.
The spread between the option price and the fair market value of the employer-provided stock at the date of exercise of a nonqualified stock option constitutes wages.
NSQs are treated as ordinary income for tax purposes at the time of exercise, assuming the fair market value at exercise is higher than the option price (a positive spread).
has added currency option trading from GFInet's FEN ICS product, a move that Currenex says will "deepen its market information, research and analytics by making available to its members FENICS' FX option price analysis and data.
7 million--the difference between her 7 cents a share option price and the proposed IPO stock price of $6--it's a mere fraction of the paper profit she held when eBay's stock price hit $323 later that year.
This change in sentiment, from worthless to valuable, powered the option price higher and put profits in the pockets of option traders.
While the current standard does not require recognition of expense if the option price is at least equal to market price at date of grant, the proposed standard treats all options as having value.