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Premium

the price paid or received for an option in the marketplace. Equity option premiums are quoted on a price per share basis, so the total premium amount paid by the buyer to the seller in any option transaction is usually equal to the quoted amount multiplied by 100 (underlying shares). The total premium amount paid by the buyer to the seller for index options is multiplied by a multiplier (usually 100). Option premium consists of intrinsic value (if any) plus time (extrinsic) value.