front fee

Front fee

The fee initially paid by the buyer upon entering a split-fee option contract.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

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.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
References in periodicals archive ?
However, if the customer does not take out the loan or credit card within six months the credit broker is only able to keep pounds 5 of the up front fee and should refund the balance.
The winners of tenders will pay up front fee amounting to Rp 438.64 billion and operation right cost (BHP) for the first year at Rp 438.64 billion.
They usually charge an up front fee for filing your claim and they take a percentage of any refund.
He said the dodgy firms then ask for a pounds 165 up front fee, which vulnerable people have been duped into paying.
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.
The poorest students will continue to have the full amount of the old up front fee paid by the state and they will also qualify for a grant worth pounds 1,000, which is due to come into force next year.
'' 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.
* Up front fees requested for processing transactions.
Instead a subsidised level of loans, enough to cover tuition fees, could uphold the "no up front fees" principle, the report said.
Research by the Higher Education Policy Institute (HEPI) said abolishing up front fees could cost the taxpayer pounds 1.6bnin 2010.
``We are getting rid of unpopular up front fees, will continue to pay the first pounds 1,100 of any fees for students most in need.