Glossary/ Options
Options
Premium
The price of the option itself — what the buyer pays and the seller receives.
Where this comes up
Lessons that use the term in context, which is usually more useful than the definition on its own.
- Gaps, and what fills them — Empty space on a chart, and the three kinds of it.
- Read the payoff before the price — Maximum loss, maximum gain and breakeven, in one picture.
- What you are paying for — Intrinsic and time value, separated properly.
- Theta and the shape of decay — Why the last week behaves nothing like the first.
Nearby terms
Expiry · Greeks · Implied volatility · Intrinsic value · Open interest · Option chain