premium means: 1. A bond that is sold at a higher price than its par value. 2. The option contract’s price. Futures trading also uses this term to refer to the difference between the spot price and the futures price. Convertibles: The percentage by which the convertible’s price exceeds its parity. Let’s say a stock trades at 45 and a bond convertible at 50. The convertible bond will trade at 105. An identical bond that does not have the conversion function trades at 90. The premium in this instance is 15.66=105-9090. The bond will trade as a fixed-income bond if the premium is large; low bonds, just like stocks. See: Gross parity, net parity. Futures: The excess of the fair value of the future over the spot, which will in theory equal the Treasury bill yield during the expiration period less the expected dividend yield up to the expiration. 5. Option prices in open markets sometimes reflect the price for the option. Price that is higher than parity. 6. Straight equity: Price higher than the price of an inside or last sale. Similar: The inverted market premium paymentback period. Also known as break-even period; time required to recover premium per share for convertible securities. (in Stock Market Dictionary)

What else does premium mean?

  • A payment or amount required to insure a policy. (in Merlin Dictionary)
  • A loan amount is the money you pay to get it. (in Merlin Dictionary)
  • A regular interest payment on a loan. (in Merlin Dictionary)
  • An additional amount of money, such as a bonus or regular salary, paid to an employee. (in Merlin Dictionary)
  • A value is the amount that something (e.g., a security, or currency) is worth above its nominal or initial price. (in Merlin Dictionary)
  • Amount at which an option of securities is purchased or sold. (in Merlin Dictionary)
  • You can get something free of charge or for a lower price to induce you to purchase another product. (in Merlin Dictionary)
  • An award or prize. (in Merlin Dictionary)
  • A rare or highly valued item. (in Merlin Dictionary)
  • Training in a trade, profession or other activity is covered by payment (in Merlin Dictionary)
  • Superior quality and value (in Merlin Dictionary)
  • ( Premium () As a result of scarcity, more valuable than normal. (in Merlin Dictionary)
  • Insurance coverage can be purchased in lump sums or as installments. 2. An additional payment to cover an option, priority or act. (in Legal Dictionary)