Futures Trading Terms Glossary

OPTION PREMIUM

Welcome to the RJO Futures trading terms glossary. Within this glossary, you will find an expansive list of trading terms covering commodity, option, and futures trading terminology. Bookmark this section as a quick reference for definitions of trading terms as you browse the Internet and our site for more information on futures and options trading within the financial and commodities markets.

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Option Premium×

The price a buyer pays (and a seller receives) for an option. Premiums are arrived at through open outcry. There are two components in determining this price: extrinsic (or time) value and intrinsic value.