The calculation method of option premium is easy to understand. There are tens of thousands of trading units in the option contract. The calculation method is to multiply the latest price by 10000 to get the premium cost of an option contract.
The price of option is called royalty, also called option fee. Option fee refers to the fee paid by the option buyer to the option seller in order to obtain the rights conferred by the option contract. For option buyers, no matter where the price of wheat futures changes in the future, the biggest loss they may face is only royalties. This feature of options gives traders the ability to control investment risks. The option seller collects the option fee from the buyer in return for taking the market risk.