The price paid by the buyer to the seller for an option contract is called a(n)_____.

Question

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The price paid by the buyer to the seller for an option contract is called the premium. A call option gives the holder the right but not the obligation to buy an underlying asset at a specified price, while a put option gives the holder the right but not the obligation to sell an underlying asset at a specified price. Currency swaps involve exchanging one currency for another for a set period of time. Marked-to-market refers to the practice of revaluing securities or other assets based on current market prices.

The Price Paid by the Buyer to the Seller for an Option