The option premium is
A) the market price of the option.
B) the amount by which the stock price is expected to move before the option expires.
C) the fee charged by the options exchanges for executing transactions.
D) the difference between the strike price and the underlying price of the security.

Question

Quizplus · Accepted Answer

The option premium is the market price of the option, which is the price a buyer pays to the seller to acquire the option. This premium is determined by various factors including the underlying asset's price, strike price, time until expiration, volatility, and interest rates.

The Option Premium Is