0
Is the seller of the option retains the option premium whether or not the option is expired?
Wiki User
∙ 13y ago
Yes, as soon as the option is sold on the open market to a buyer, the seller immediately receives and retains the option's premium. This premium is kept regardless of the action of the market or the buyer. In the event the option expires worthless, the premium becomes profit for the seller, or in contrast, the premium can be used to help offset loss if the seller decides to close the position and buy back the option.
It is important to note, however, that the premium received remains in escrow and cannot be used in any capacity until the risk taken on by the trade is eliminated in due course by either the expiration of the option, or the buy back of the position.
Wiki User
∙ 13y ago
Add your answer:
Earn +20 pts
Does Capitol One offer a premium finance option?
No. This premium finance option is usually handled by another company. Capitol One does not lend funds for insurances such as life, etc. This is not the purpose of Capitol One. It is not a premium finance company.
When must a long call option be sold to collect the premium?
Whenever you want. You collect the premium at the time you sell the call.
Can you pay a one time fee for a life insurance policy?
Generally, most insurers do offer an option by which you can pay the entire premium at once. This is usually called, appropriately, "single pay". This is not applicable on all life policies.However, in most Ulip policies, Single Premium or one-time premium option is there. Specially in conventional policy, where single premium option is there, you gain by way of paying lesser amount in comparison to consolidated regular premium amount.
How do you determine whether the currency option is in the money?
"In the Money" is a term used in option trading as a determinate to if an option has "Intrinsic Value." In the Money, does NOT mean in profit. There are two components to an option value, TIME VALUE, and INTRINSIC VALUE. Time Value + Intrinsic Value = Option Premium. When the market price is above the option strike price of a CALL option, that option is considered "In the Money" i.e. having intrinsic value. When the market price is below the option strike price of a PUT option, that option is considered "In the Money" i.e. having intrinsic value.
What is an option buy?
An option buy is when you buy an option, whether call option or put option, using the Buy To Open order.
Which of these is the best description of term insurance. purchased for a set premium cost with the option of paying in more?
purchased for a certain time period with a specific premium cost
Black scholes model plus calculation of put option premium?
Use PCP relationship
Do you have to make contributions to a flexible premium deferred annuity?
Nope, but you do have the option if you so choose to use it.
Why option premium changes daily and how in index and stock options?
The option premium changes based on the change of stock price, days to expiration, change in implied volatility and dividend price. Options Weekly has a nice tutorial on options, see related links.
If prices drop what happens to call option prices?
If the price of an underlying commodity or security drops, the value of call options will decline as well. If you are long the calls this would be bad. If you are short the calls this would be good. Long Call - Risk Limited to Option Premium Paid, Profit Unlimited. Hoping for Market Rise. Short Call - Risk Unlimited, Profit limited to the premium received for the option. Hoping for Market Decline, or stay the same. Long Put - Risk Limited to Option Premium Paid, Profit Unlimited. Hoping for Market Decline. Short Put - Risk Unlimited, Profit limited to the premium received for the option. Hoping for Market Rise, or stay the same.
What is sprint navigation premium?
Added features to the standard version of Sprint Nav, for instance the weather option
Is the best description of universal life insurance?
purchased for a set premium cost with the option of paying more.
