For people who have just come into contact with the securities market, they need to know some basic knowledge and technical terms first, so that they can make investment after rational analysis. Among them, high premium is a commonly used term when we judge the stock price.

What do you mean by high premium?

Premium is a term in the securities market, which means that the actual amount paid far exceeds the par value or face value of securities or stocks, that is, the transaction price exceeds the par value of securities, and as long as it exceeds it, it is called premium.

Simply put, a high premium is higher than the actual value. On the other hand, in the fund, it refers to the closed-end fund market, and the transaction price is much higher than the value of the net asset value of the fund unit. Usually, when we say that a stock has a premium, we mean that there is money after deducting various fees and other expenses.

If it is a high premium, we will face certain risks when buying, so we must understand it in detail, estimate it as a whole and judge its premium space. When we say how much premium a stock has, we mean to judge the price difference between the target price of the stock and the par price of the stock. Premium space refers to the extent to which the transaction price exceeds the par value of securities.