back fee

Back Fee

The premium charged upon the second term or portion of a compound option.

Notes:

In other words, the back fee is the fee paid by the owner of a compound option to the owner of the underlying option when the compound option is exercised.

See also: Compound Option, Front Fee

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Back fee

The fee paid on the extension date if the buyer wishes to continue the option.

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back fee

Payment made by the owner of a compound option to the owner of the underlying option when the compound option is exercised. Compare front fee.