Option Premium
Also called: premium
The price of an option, paid by the buyer and collected by the seller.
Premium is what an option costs. Buyers pay it for the right the option gives them; sellers collect it for taking on the obligation. Premium is quoted per share, so multiply by 100 to get the dollar amount for one contract. Bigger premium usually means bigger expected movement, which means bigger risk.
For example
A put quoted at $0.60 costs $60 for one contract ($0.60 x 100). If you sell it, that $60 is yours to keep no matter what happens next.
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