Premium, that is, the price of the option, 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.

For the seller, it is the reward for selling options. The premium depends on the expiration month of the option and the selected exercise price, which is generated by bidding between buyers and sellers.

Royalties are very important in option trading. The buyer of the option can control the possible loss within the appropriate amount. The seller of the option can get a royalty income immediately when selling the option, and does not need to deliver the subject matter immediately. But at the same time, the seller has the obligation to perform the option contract, no matter whether the price change in the futures market is favorable or unfavorable to him at this time.

Compared with futures, premium is that the futures price is lower than the current spot price, and the market expectation is generally optimistic. Similarly, the discount is the opposite.