What Is Option Premium?
The premium is the price paid by the buyer to the seller to purchase the option. It represents the cost of owning the right.
Premium depends on factors like:
Current market price
Strike price
Time left to expiry
Volatility
Interest rates
Demand and supply
Two components decide the premium:
Intrinsic Value – Real value based on price difference.
Time Value – Extra value because the option has time before expiry.
As expiry approaches, time value decreases — this is called Time Decay (Theta).
The premium is the price paid by the buyer to the seller to purchase the option. It represents the cost of owning the right.
Premium depends on factors like:
Current market price
Strike price
Time left to expiry
Volatility
Interest rates
Demand and supply
Two components decide the premium:
Intrinsic Value – Real value based on price difference.
Time Value – Extra value because the option has time before expiry.
As expiry approaches, time value decreases — this is called Time Decay (Theta).
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Details:
Contact : +91 7678446896
Email: skytradingmod@gmail.com
WhatsApp: wa.me/7678446896
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Hello Everyone! 👋
Feel free to ask any questions. I'm here to help!
Details:
Contact : +91 7678446896
Email: skytradingmod@gmail.com
WhatsApp: wa.me/7678446896
Feel free to ask any questions. I'm here to help!
Details:
Contact : +91 7678446896
Email: skytradingmod@gmail.com
WhatsApp: wa.me/7678446896
Pubblicazioni correlate
Declinazione di responsabilità
Le informazioni e le pubblicazioni non sono intese come, e non costituiscono, consulenza o raccomandazioni finanziarie, di investimento, di trading o di altro tipo fornite o approvate da TradingView. Per ulteriori informazioni, consultare i Termini di utilizzo.