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GLOSSARY: Enter search term:
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Glossary Term: PREMIUM

Definition(s) for PREMIUM:


1. ) refers to the cost associated with a derivative contract which refers to the combination of intrinsic value and time value. It commonly applies to options contracts. However, it also applies to off-market forward contracts.

2. ) For bonds and preferred stock, the premium is the amount by which the price exceeds the face, or par, value. For options markets, the premium is synonymous with the option's price.  See also Discount.

3. ) The amount by which the auction price of a bill, note, or bond is higher than its face value.

4. ) an amount paid on a regular schedule by a policyholder that maintains insurance coverage.

5. ) The price of an option contract, determined in the competitive marketplace, which the buyer of the option pays to the option writer for the rights conveyed by the option contract.

6. ) 1. Total price of an option: intrinsic value plus time value. 2. Often (erroneously) this word is used to mean the same as time value.

7. ) If the market price of a new security is higher than the issue price; the difference is the premium.

8. ) A term used to describe the price paid for a covered warrant.

9. ) When the price of a bond exceeds its face value.

10. ) The amount by which a security is quoted or issued above its face value.


See Also:
CONVERSION PREMIUM, INVESTMENT PREMIUM (FOR CONVERTIBLE BONDS), LIQUIDITY PREMIUM, CALL PREMIUM, BOND PREMIUM, DEFAULT PREMIUM, FORWARD PREMIUM, INSURANCE PREMIUM, LENDING AT A PREMIUM, OPTION PREMIUM, PREMIUM INCOME, RISK PREMIUM, PREMIUM OR DISCOUNT PRICE, PREMIUM BOND, DISABILITY-WAIVER-OF-PREMIUM RIDER, LEVEL-PREMIUM TERM INSURANCE, OPTION PREMIUM




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