Call Premium

1. The dollar amount over the par value of a callable fixed-income debt security that is given to holders when the security is called by the issuer.

2. The amount the purchaser of a call option must pay to the writer.

Investopedia Says:
1. The call premium is somewhat of a penalty paid by the issuer to the bondholders for the early redemption.

2. In order to receive the rights associated with a call option, the premium must be paid to the seller.

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1. Amount in excess of par value that a company must pay when it calls a security. It is the difference between the Call Price and the maturity value. The issuer pays the premium to the security holder in order to acquire the outstanding security before the maturity date. The call premium is generally equal to one year's interest if the bond is called in the first year, and it declines at a constant rate each year thereafter.

2. Option.