Premium is the price of the option. It is the fee that the buyer of the option has to pay to the seller, that is, the fee that must be paid to obtain the right. To the seller, it is the reward for selling the option. The level of the premium depends on the option expiration month and the selected strike price, etc., and is generated by bidding between buyers and sellers. In options trading, premium is very important. The option buyer can control the possible losses within the rights limit. As for the option seller, after selling an option, he can immediately receive a premium income without the need for immediate delivery of the underlying asset. But at the same time, the seller has the obligation to fulfill the option contract, regardless of whether the price changes in the futures market at this time are favorable or unfavorable to him.

The premium is the price of the option, which is the price paid by the buyer to the seller. Options trading is about premium, which is determined by market bidding. Factors that affect the level of option premium include execution price, futures market price, length of expiration date, futures price volatility, risk-free interest rate and market supply and demand forces, etc.

The Commercial Press' "English-Chinese Securities Investment Dictionary" explains: Royalty English is: option price; premium. Also: option premium; margin; option contract price. During the options trading process, the holder who opens a call option position pays the margin to the writer who opens a put option position. It can be understood as the trading price of an options contract. In the option trading quotations published in newspapers, the option premium is quoted as a multiple of 1/8 or 1/16 of 1% of the market price of the exercise type. Stock options are traded in units of 100 shares. For example, the price of a stock call option with a market value of 100 yuan per share is 5/8 yuan, which means that the equity of buying one share of the stock is 62.5 cents, or 62.5 yuan for 100 shares. See: option price.