# Option premium

- Canonical URL: https://www.gerhardmerk.de/option-premium
- Post ID: 590518
- Modified: 2023-07-25T21:12:18+00:00
- Language: en

## Definition

payment by the buyer of an option to the seller (writer; option writer). The writer is obliged to buy (call) or sell (put) the relevant quantity of the underlying security at the agreed price if the holder exercises his option. - The price of an option is usually determined by - the current price of the underlying asset, - the strike price, - the term of the option, - the (risk-free) interest rate during the term of the option, and - the volatility of the return on the underlying asset. Attention: The financial encyclopedia is protected by copyright and may only be used for private purposes without express consent! University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec. Professor Dr. Eckehard Krah, Dipl.rer.pol. E-mail address: info@ekrah.com https://de.wikipedia.org/wiki/Gerhard_Ernst_Merk https://www.jung-stilling-gesellschaft.de/merk/ https://www.gerhardmerk.de/

## Machine-readable

- Generator: Merk Knowledge 1.1.1