Premium is the upfront amount the writer demands from the holder for writing the options contract
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Premium pricing is the practice of setting the price of products or service artificially high. Premium pricing is often most effective in the early days of a product’s life cycle, and ideal for small businesses that sell unique goods.
Suppose a trader buys 1,000 shares of BP (BP) at $44 per share and simultaneously writes 10 call options (one contract for every 100 shares) with a strike price of $46 expiring in one month, at a cost of $0.25 per share, o...
Options are conditional derivative contracts that allow buyers of the contracts (option holders) to buy or sell a security at a chosen price. Option buyers are charged an amount called a "premium" by the sellers for such a right. S...
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