front fee

Front fee

The fee initially paid by the buyer upon entering a split-fee option contract.

Front Fee

In a compound option, the premium one pays on the first option contract. A compound option is an option on another option. For example, one may buy a call on a put, which is an option to buy an option to sell some underlying asset. An investor buying a compound option pays a premium on the first option but does not pay a premium on the second option unless the first option is exercised (if it is exercised). This first premium is the front fee. See also: Back Fee.

front fee

The payment made to acquire a compound option. A second payment must be made in the event the compound option is exercised. Compare back fee.
References in periodicals archive ?
The Department for Education and Skills insisted, however, that his comments, on BBC Radio 2's Jeremy Vine Show, could not be interpreted as meaning ministers were poised to abolish the current pounds 1, 100 up front fee.
Alternatively, firms interested in making a long term investment can take payment for their services in the form of a smaller up front fee combined with an equity interest in a specific venture.
Most reputable agencies would not resort to mass castings at hotels nor seek up front fees with no guarantee of work.
For example, if a borrower plans to live in a home for a short period of time, up front fees may not be attractive," said Peskin.
The FFELP loans have low-to-no up front fees and a repayment benefit program T.