What is Option Premium?
Option Premium (also called premium) — The price paid by the buyer to the seller for an option contract — the maximum loss for the buyer.
In simple terms
Paying ₹50 premium on one lot of 50 costs ₹2,500.
Why Option Premium matters when you invest
Understanding option premium helps you make better-informed decisions when you invest and trade on ROAR by DP TradeKING. Open a free account to put it into practice — ₹0 delivery brokerage and zero-commission direct mutual funds.
Option Premium — frequently asked questions
What is Option Premium?
The price paid by the buyer to the seller for an option contract — the maximum loss for the buyer.
What does Option Premium mean in the stock market?
The price paid by the buyer to the seller for an option contract — the maximum loss for the buyer. Paying ₹50 premium on one lot of 50 costs ₹2,500.
Can you give an example of Option Premium?
Paying ₹50 premium on one lot of 50 costs ₹2,500.
Put it into practice — open a free account.
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