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Derivatives

  Derivatives   |   Terms
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  • August 20, 2020
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Option Money

The price that is paid or received for an option. For an option buyer, it is the cost of the option- the cost incurred by the buyer against the right to exercise on an underlying. For a seller, it is the price received from granting the buyer the right to exercise. The price or cost of a call option is known as the call money. For a put option, it is referred to as the put money.

For traded options, the option money is typically termed the “premium” (option premium).


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